“Our updated estimates suggest that households held less than $190 billion of aggregate excess savings by June,” San Francisco Fed researchers Hamza Abdelrahman and Luiz Oliveira said in a blog post published Wednesday on the bank’s website.

“There is considerable uncertainty in the outlook, but we estimate that these excess savings are likely to be depleted during the third quarter of 2023.”

Eoin Treacy's view

There are substantial events coming up in Q3 that are worth considering now. Depleted personal savings are one factor. The resumption of student loan payments for 40 million people is another. Continued upward pressure on rental costs are another. Yet, the Federal Reserve is still raising rates and does not expect to cut until well into 2024.