Consumer

Inflation expectations in the US remain reasonably well anchored and there are few signs of a brewing wage-price spiral. Thus, the near-term risks to growth outweigh the risks of higher inflation. Looking beyond the next year or two, however, we are worried about stagflation.

In Section I, Doug notes that a negative stance toward stocks will require a meaningful and imminent deterioration in the US macro data given the ongoing impact of AI optimism on the global equity market. In Section II, Chester reviews the outlook for stablecoins, cryptocurrencies, and central bank digital currencies.

In Section II, Chester reviews the outlook for stablecoins, cryptocurrencies, and central bank digital currencies.

The Indian rupee remains vulnerable to further depreciation amid slowing growth, tight domestic policy, and fragile capital flows. Trade risks and a weakening external balance will likely keep INR underperforming EM Asia peers. 

The cost of tariffs is falling on the US consumer, not foreign exporters or US firms.