Filed under: Consumer experience, Money and Finance Today, Economic data, Personal finance, Recession

Reuters reports that consumer confidence has hit a 28-year low. That should not come as a surprise. After all, between 2000 and 2007 the median income has dropped from $61,000 to $60,500. But prices have skyrocketed. And with growth slowing — the prospect of layoffs looms large while consumers expect prices to keep rising.

There is something called the Federal Reserve. And it’s supposed to keep those inflationary expectations under control by raising interest rates to strengthen the currency and keep credit use from going haywire. But the Fed got confused. It thought that by cutting rates from 5.25% to 2%, it could revive a frozen credit market without boosting inflation. Whoops! Now the credit markets remain frozen but actual inflation and expectations for future inflation are both skyrocketing.

Continue reading Consumers sulk as inflation devours their stagnant income

Permalink | Email this | Comments

Via [bloggingstocks]

Share This

This entry was posted on Saturday, May 31st, 2008 at 3:21 pm and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.