High-Income Americans Cut Spending as Gas Prices Top $4

Wall Street analyst Meredith Whitney reports that high-income Americans are reducing their spending due to the inflationary impact of rising oil and gas prices. This shift follows a divergence in the correlation between credit card balances and gas prices, indicating that even high-earners are tightening budgets as the national average for regular unleaded gas reaches $4.43 per gallon.

Energy costs have surged as Brent crude hit $109 a barrel this month, driven by supply disruptions from the war in Iran and a lack of progress on a U.S.-Iran peace deal. Brown University estimates that the conflict has added $927 in monthly energy expenses for the average U.S. household.

Whitney warns that these rising oil prices are fueling broader inflation and pushing the 10-year U.S. Treasury yield toward 5.23%. She suggests this trend may increase borrowing costs for all consumers, extending the economic pressure beyond the immediate cost of fuel.