And inflation could erode the excess savings consumers accumulated through the pandemic, especially if price increases continue to run ahead of wage growth,' said Capital One CEO Richard Fairbank on the company's earnings conference call Thursday. 'The big headwinds for consumers are price inflation and higher interest rates. What's more, higher rates could eventually slow down the economy. Inflation is still running rampant, and rate hikes from the Federal Reserve, meant to try to rein in prices, will take some time to have their desired effect. On Thursday, credit card giants Discover and Capital One both missed analysts' expectations for their quarterly earnings and their stocks tumbled on the news.ĭelinquency rates rose modestly, and both banks also boosted their reserves for future credit losses - a cautionary move that shows concern about the direction of the economy over the next few months.Ī lot of macro factors are at play. Results from credit card companies and wireless carriers this week highlighted that warning sign. But one thing is clear: Some consumers, especially less affluent ones, are starting to have trouble paying their bills on time. (CNN) - Is America's economy already in a recession? That's a debate among central bankers, investors and economists, not to mention politicians.

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