UBS On-Air: Paul Donovan Daily Audio 'Peculiar US price increases'

US consumption growth now depends on savings drawdown, not income gains, since real incomes have stagnated since January 2025.

• Real incomes stagnant: Paul Donovan says US real incomes have been economically flat since January 2025, questioning CPI's reliance on 'fantasy' owner's equivalent rent.
• Savings are the swing factor: With incomes flat, consumption growth depends on side-hustle income, falling savings rates, or drawing down savings stockpiles; retail sales data is the next test.

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