Republican and independent consumer confidence wanes as midterms approach, says economist

At the Kansas City Federal Reserve’s annual symposium, Conference Board chief economist Dana Peterson said consumer confidence is slipping among Republicans and independents as the midterms near. She attributed the shift to concerns that inflation and interest rates will stay elevated, noting that Democrats are already the most pessimistic group. Survey respondents also cited rising oil and gas prices, food costs, and ongoing wars as sources of unease.

Peterson predicted Governor Kevin Warsh will probably oppose a rate increase at next month’s Fed meeting, warning that further demand erosion could force firms to cut prices or jobs. She called for Fed Chair Warsh to reaffirm the central bank’s independence, especially as President Donald Trump seeks to remove Governor Lisa Cook. Finally, Peterson highlighted structural inflation drivers such as demographics, labor shortages, climate risks, and increased defense spending.