In the United States, consumers are starting to reduce their spending due to rising prices and a deteriorating economic outlook, as reported by Synchrony Financial. Recent data from the Federal Reserve showed that Americans are taking on more debt, leading to an increase in delinquencies for auto loans, credit cards, and home credit lines.

Philadelphia Federal Reserve President Patrick Harker has expressed concerns about potential economic troubles, particularly in the consumer sector, where confidence is declining. This is reflected in the decrease in purchase volumes across all income groups, signaling a more cautious approach to spending among consumers, according to Max Axler, Synchrony's chief credit officer.

Synchrony, a consumer finance company that issues credit cards in collaboration with retailers, has observed a decline in purchase volumes industry-wide. Consumer sentiment has dropped significantly, driven by soaring inflation expectations and fears of tariffs impacting prices and growth.

Major retailers like Target and Walmart have noted that shoppers are carefully managing their spending, opting for deals and lower-priced items. Household spending cuts could lead to increased late credit payments or loan defaults, potentially impacting bank revenues. Loan growth has slowed down, which could affect banks' net interest income and overall revenue.

The concerns surrounding household finances have had a negative impact on consumer finance stocks, with shares of companies like American Express, Capital One, Synchrony, and Discover declining in the past month.