JPMorgan: A 'very healthy' consumer is dealing well with higher interest rates
JPMorgan acknowledged that if interest rates remain very high for a long time, that would certainly hurt consumer spending. But so far, that’s not the case, as the consumer is currently “very healthy,” mostly because of a healthy labor market.
The bank said the consumer has remained “quite resilient” over the past few years despite a number of headwinds. But if the Federal Reserve becomes aggressive in raising interest rates to cool the economy and fight inflation, that would lead to higher unemployment and produce weaker consumer credit results.
The odds that the Fed will hike rates after its Oct. 28 policy setting meeting are currently 23.8%, according to the CME’s FedWatch tool.