With Greenspan next week, if there is any sniff that maybe they are coming close to the end of their tightening, then maybe these flattening trades are not going to pay off as much as they have already, and that is why people are being a little more cautious about the flattening trades.
They haven't changed (their bias). The weakness in corporate profits is a problem, and investment continues to decline.
The underlying trend is a bit sideways.
The economy continues to grow at a good pace but without much inflation.
The real story here is the (slower) growth of consumption in the quarter.
Contrary to what people in the market are saying, inflation is not a problem to the Fed, ... because an economic slowdown is invariably followed by a rise in inflationary pressures.
It's going to bother consumers. When you look at consumer confidence over time, the main things that affect it are employment and income; but there are other events that can affect confidence, if only temporarily, and war is clearly one of them.
You can't look at these numbers and say things are going to be booming going forward.
Debt is not in itself going to be a cause of contraction in consumer spending, but it could exacerbate any negative change that does occur.