High Interest Rates Dampen Consumer Sentiment Despite Positive Economic Signs

Despite positive economic signs, consumer sentiment remains very negative due to high interest rates making big purchases much more expensive
Interest costs are excluded from inflation measures like CPI, creating a disconnect between official stats and consumer reality
Summers estimates that by including interest costs, inflation would be 8% not 3% and peaked at 18% in mid-2022, not 9%
Interest payments have surged, with median monthly mortgage payments rising from $1,500 to over $2,600 and average auto loan rates up $200 per month
Measures like CPI have changed over time in ways that understate inflation's impact, confusing policymakers on why consumers feel economic misery