Alberto Musalem

By and large, when I look at consumer finances, if you look at consumer balance sheets, by and large, for the economy, they're okay.

The consumer is not over-indebted here.

Now, over the past year, we saw an increase in subprime loan defaults.

We saw an increase in credit card defaults.

Now, over the past year, those have started to stabilize and actually come down some.

But at the lower end of the income spectrum, you always have to worry that those consumers who live

you know, hand to mouth, need to wait until the end of the month to make it, you know, could be always, could be strained, yeah.

Two questions, two answers.

Companies tell me that uncertainty has plateaued and that they can understand how to operate with this new higher level of uncertainty.

So some of that is going on.

In terms of pass-through of higher costs, companies are experiencing higher costs.

Some are related to tariffs.

Some are related to other things like insurance, which is totally unrelated to tariffs.

And companies that are upstream, so earlier in the production process, are successful in passing on those costs to other companies to build products that they build.

Companies that are closer to the consumer and selling to the final purchaser of a good are having more difficulty in passing things on because they are facing some pushback from the final buyer.

I see the labor market as having cooled in an orderly way, both because supply and demand have cooled.

the latest challenger job announcements, which you're referring to, I definitely took notice of them, but they don't necessarily mean the labor market is about to go into a deterioration phase.

In the same week that they were announced, as you know, the weekly claims, which are

another very good indicator of layoffs, has remained stable so far.

So you have to look at all of the data in the labor market and see whether those layoff announcements will actually materialize.