Omar Barbiero

The views expressed herein are solely those of the authors and should not be reported as representing the views of the Federal Reserve Bank of Boston, the principals of the Board of Governors, or the Federal Reserve System. Assessing how import prices affect US consumers requires looking beyond direct consumer purchases of imported products.

The views expressed herein are solely those of the author and should not be reported as representing the views of the Federal Reserve Bank of Boston, the principals of the Board of Governors, or the Federal Reserve System.

During the COVID-19 pandemic, US households accumulated a historically high volume of personal savings. As the crisis waned, personal savings started to decline. Economists disagree on whether households have drained their excess savings, and they disagree on which income group is more likely to have done so. The lack of consensus stems from different assumptions about today’s long-term saving rate, which is used as a benchmark to define excess savings.