Fed's Powell: Stock market is helping support consumer spending now

Core Insights - The stock market's performance is currently supporting consumer spending and the overall economy, as noted by Fed Chair Jerome Powell [1][2] - A decline in the stock market could negatively impact consumer spending, but significant drops would be necessary to cause a sharp decline in spending [1][6] Economic Disparities - The U.S. economy is characterized as "bifurcated," with lower-income individuals reducing spending while wealthier individuals continue to spend, thus sustaining economic activity [3][5] - According to Moody's Analytics, individuals in the bottom 80% of income distribution are struggling to keep spending in line with inflation, while the top 20% are increasing their spending [4][5] Wealth and Spending Behavior - The relationship between stock market wealth and consumer spending is not a direct correlation; wealthier individuals tend to spend less of each additional dollar they gain [5] - Conversely, lower-income individuals exhibit a higher propensity to spend as their income increases [6]