Just an expansion to my response earlier. Most so-called frivolous spending that seems to be the topic of discussion within many circles is arguably the result of of easy credit and hence credit cards. Whether the Fed funds rate is 3%, 3.5%, or 5%, it will not affect how the American consumer spends on his/her credit card. Credit card rates have astronomical rates - 18%, 25%, 29% amongst other incredible numbers - and *that* in itself should be a deterrent to bad spending habits and debt.
The Fed funds rate is more of a response to stimulate business capital spending which in turn creates employment. I think it's fairly clear at this point that we have a weakening labor market.
Here's a perfect example of increasing credit card interest rates while the Fed funds rate is decreasing. So, this should give you some hope that Fed rate cuts fear do not automatically mean there will be an increase in frivolous spending!
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