Bernard Baumohl Household Quotations

Housing prices in many communities will appreciate less rapidly --- and in some communities actually fall. This reduces the wealth effect from real estate assets, shrinks home equity borrowing, and increases pressure on households to replenish their savings.

We have unmistakable signs that households are becoming more cautious about spending.

When consumers are burdened with heavy debt loads, rising interest rates, higher energy costs, no personal savings and household income growth that falls below inflation, something had to give.

The sharp pullback in economic growth during the final three months of 2005 shows the law of gravity has not been repealed. When consumers are burdened with heavy debt loads, rising interest rates, higher energy costs, no personal savings and household income growth that falls below inflation, something had to give. This retrenchment in spending was generally foreseen, though economists weren't sure on the timing and magnitude.

The stress on household finances in coming weeks will be the greatest since the last recession in 2001,

With household finances already under considerable stress, one has to wonder if another round of rate hikes will lead to a more severe cutback in consumer spending.