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Consumers at the limit as the Fed’s inflation struggle intensifies: Boockvar

The economy may have reached a critical turning point.

Investor Peter Boockvar warns that the Fed’s surge in inflation cannot be meaningfully contained and consumers will not be able to tolerate any more.

“It’s a problem. At what point do consumers blink in the face of these rising prices?”, CIO of Bleakley Advisory Group said on CNBC’s “Fast money“On Wednesday.” For low-end consumers, they are already blinking. “

This week’s TransUnion survey reflects the problem of consumers with “highest risk credit profiles” in the form of trending credit balances and rising delinquency rates.

Boockvar reports A harbinger of the above. In this week’s memo, he warned that consumers are at a “road fork.”

“Consumers will call out spending timeouts because of continued price increases,” he wrote. “It’s inevitable because prices are important to US consumers who love discounts,” he said.

Federal critic Boockvar believes that all income levels are at the limit. He warns that he is on the verge of postponing purchases until prices fall. This will have distressing consequences for the broader economy. It is the view of Federal Reserve Chairman Jerome Powell, Avoid risky recessions..

“This will be the most aggressive tightening cycle in more than 40 years, from rate hikes to balance sheet contractions,” said CNBC contributor Boockvar. “Given how much economic activity depends on cheap money and how much the market depends on cheap money, we don’t know how it is possible to achieve a soft landing.”

Still, Wall Street seemed to embrace the Fed Half rate increase and Powell press conference.. The S & P 500 I saw that Best day since May 2020..

Boockvar is expecting Evaporating bounce..

“If a soft landing is unlikely, that is, if a recession occurs, that means that revenues must go down,” Boockvar said.

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Consumers at the limit as the Fed’s inflation struggle intensifies: Boockvar

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