Consumers are doing well in navigating the current economic environment, says Mastercard's Meyer

Summary

Mastercard Economics chief Michelle Meyer explains that consumer spending remains healthy, driven by strong labor markets, wage gains, and wealth effects, even as higher energy prices pressure real wages. She expects core inflation to stay moderate, helping real wages turn positive again. A massive AI-driven capital expenditure boom is also noted as a key economic force, but no specific trade ideas are directly identified.

• Consumer spending continues at a solid pace, with gas station spending up 20-30% YoY and still broad spending elsewhere.
• Job creation and consistent wage growth are the primary drivers, along with positive wealth effects.
• Real wage growth recently dipped negative due to headline inflation but should recover as energy prices ease and core inflation remains moderate.
• Fed Chair Powell sounded hawkish but is not committing to hikes; policy will remain data-dependent.
• A massive capex boom, especially in AI, is coexisting with steady consumer demand, reducing risk of overinvestment.