Citigroup CEO Jane Fraser shared what she sees in consumer behavior as inflation in the US worsens. During an interview, she said she sees a K-shaped consumer pattern among low-income Americans and wealthier consumers in the United States.
Citigroup CEO Shares How Inflation Affects Consumer Behavior
Citigroup CEO Jane Fraser was interviewed by CNBC's Sara Eisen. They discussed American consumer behavior during the ongoing inflation crisis. She said that she sees a "K-shaped consumer" as prices increase.
Jane Fraser explained that lower-income Americans are becoming more cautious with their spending. On the other hand, wealthier the US residents continue to spend more.
"A lot of the growth in spending has been in the last few quarters with the affluent customer," she said via CNBC's latest report.
"We're seeing a much more cautious low-income consumer," added the Citigroup CEO.
Jane Fraser stated that lower-income Americans are being more pressured by daily living expenses, which remain high and are continuously increasing. Although they have employment, inflation causes debt service levels to rise higher than they were before.
The US Inflation Expected To Continue
The Associated Press previously reported that interest rates could stay at current levels for two decades as inflation continues. The Federal Reserve also informed Americans that inflation has remained high in the past few months.
Because of this, the Federal Reserve said that it is not planning to cut interest rates until it is more confident that the price increases are slowing sustainability to 2%, which is the central bank's target.
Fed Chair Jerome Powell said that inflation has shown little progress in the past months in reaching its 2% objective. He added that this shows that gaining greater confidence will take longer than expected.
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