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Investors expected a much simpler economy by now.
Inflation was expected to keep easing, consumers were expected to bend under higher prices, and the next big Fed debate was supposed to be about when rate cuts could begin.
However,Bank of Americaisn't telling that story.
The bank sees an economy that still has enough momentum to avoid a classic downturn.
According to its mid-year outlook shared with me, spending levels held up, the labor market hasn't cracked, and growth remains alive and well.
Nevertheless, that resilience is not spreading evenly, and that's the uncomfortable twist.
economy might be strong in the places that matter forinflationbut fragile in the places that matter most to households.
That beckons a harder question: What happens when the economy is too hot for relief, but too uneven to call healthy? Perhaps BofA's most striking economic call is that the U.S.
is essentially running on a couple of different tracks.
In its midyear outlook, the bank described the economy as K-shaped, calling it"reflation for higher income,stagflationfor lower income." Wealthier households continue to spend at a strong pace, led by stronger balance sheets, asset gains, better job security, and exposure to a market that's spearheaded by earnings strength andAIinvestment.
IBM handed two major wins within 24 hours SpaceX's 32% crash may force Musk into radical move Conversely, lower-income households continue to absorb the harder side of the cycle, with sticky prices, higher borrowing costs, and renewed gas pressure.
For the week of June 6, lower-income spending was up5.5%year over year, while higher-income spending rose6.1%.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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