Prof G Markets Retail Sales Rise on Strength of the Rich & Senate Confirms Stephen Miran to the Fed
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Sep 17, 2025 
Mark Zandi, chief economist at Moody’s Analytics, sheds light on rising retail sales, revealing that the wealthiest Americans are driving this spending surge. He discusses the implications of wealth distribution on the economy and critiques traditional economic indicators that mask disparities. Zandi also offers insights into the Federal Reserve’s interest rate decisions. The conversation further navigates the significance of Stephen Miran's confirmation as a Fed governor, marking a pivotal shift in monetary policy representation.
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Headline Retail Data Masks Inequality
- Retail sales rose 0.6% in August, beating forecasts, but the headline masks distributional shifts.
- Mark Zandi finds the top 10% now account for 49.2% of all consumer spending, a record high.
Economy Relies On Wealthy Households
- The U.S. economy is increasingly driven by a small, wealthy segment at the top of the income distribution.
- That concentration raises macro risks if asset prices or confidence among the wealthy reverse.
Wealth Effect Fuels Top-End Spending
- Asset-price gains (stocks, housing) have amplified spending at the top through wealth effects and borrowing.
- High-income households borrow against rising assets and are less sensitive to higher interest rates, boosting their spending.