Inflation rates have shown a significant decline since peaking at 9.1% in 2022, with the latest figures from July 2024 indicating a rate of 2.9%. This marks the first time inflation has dipped below 3% since March 2021. In response to these developments, the Federal Reserve is expected to announce interest rate cuts in September, a move that could provide relief to borrowers.

Despite the positive trend in inflation, consumer sentiment remains cautious. While there was a slight improvement in sentiment in August—up 36% from the all-time low recorded in June 2022—many consumers still perceive the economy negatively due to elevated price levels and the high costs associated with major purchases.

The stock market, often viewed as a barometer of economic confidence, reflects a more optimistic outlook among investors. The Dow Jones Industrial Average has risen 19% compared to the same time last year, suggesting a growing belief in the economy's recovery trajectory, even as broader consumer sentiment lags behind.