The Federal Reserve’s encouraging September report on U.S. household wealth should bring some comfort to those concerned over American families’ ability to deal with Fed efforts to corral inflation and the slowing economy that may follow. Consumers are sitting on a lot of wealth, including cash, even as slowing asset growth may gradually make things more difficult. But this (mostly) good news also suggests the battle against inflation should be broadened.
The nearby chart, taken from the report and covering the past 15 years, shows how the level of household assets and net worth accelerated in 2020 and peaked in late 2021 as stimulus checks made their way into consumer bank accounts. Notably, the value of real estate and cash rose significantly along the way while stocks and bonds were falling in the most recent quarter.
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