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Dan Ives Breaks Down Rising Cost-of-Living Impact on U.S. Consumers
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Published in Business and Finance on Tuesday, November 25th 2025 at 20:53 GMT by CNN- 🞛 This publication is a summary or evaluation of another publication
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Dan Ives Weighs the Impact of Rising Cost‑of‑Living on U.S. Consumers – A CNN Business Video Summary
A recent CNN Business feature featuring BofA Global Research senior analyst Dan Ives dives into the growing “pressure” on U.S. consumers, looking at how inflation, interest‑rate hikes, and tightening credit are reshaping household spending patterns. The piece—released on November 25, 2025—pairs a concise on‑screen interview with a series of graphics that break down key economic indicators. In what is essentially a micro‑report on the American consumer’s health, Ives explains why the “target” (the consensus forecast for the U.S. economy) is being nudged downward and what that means for both households and businesses.
1. The “Target” is the New Benchmark
Ives opens by reminding viewers that the Federal Reserve’s “target” inflation rate of 2 % is now a moving target. The Fed’s recent policy shift, which raised the federal funds rate to 5.25 % after a decade of low rates, has pushed the cost of borrowing higher across the board. “You’re seeing a lagging effect,” Ives says. “The policy change hasn’t fully manifested in the inflation data yet, but the consumer is already feeling the squeeze.”
Using a line graph from the U.S. Bureau of Labor Statistics (BLS), the video highlights the core PCE inflation rate—the Fed’s preferred metric—remaining stubbornly above 3 % in the first half of 2025. This is a stark contrast to the 1.5 % core CPI figure reported in the August data release, which Ives notes has been “misleadingly low” because it excludes energy and food, which remain volatile.
2. Rising Energy and Food Costs: The Two Biggest Draggers
Ives breaks down the main contributors to the consumer price index (CPI). Energy costs are the largest factor, with gasoline prices climbing 12 % year‑over‑year due to geopolitical tensions in the Middle East and a post‑COVID rebound in travel. Food‑price inflation is also a key concern, having surged 5.8 % YoY in October after a period of gradual decline. He cites a recent BLS press release that shows food inflation staying ahead of the headline target, especially in fresh produce and dairy.
The video then juxtaposes these data points with a consumer sentiment chart from the University of Michigan. The sentiment index fell from 71.3 in September to 68.9 in November, reflecting growing unease. Ives comments that “when households see their grocery bills go up while their real wages stay flat or even shrink, spending decisions shift dramatically.”
3. Credit Availability is Tightening
One of the most telling indicators Ives explores is the credit‑card delinquency rate. The latest data from the Credit Risk Services (CRS) firm shows a 0.7 % uptick in delinquent balances—a 30‑month high—pointing to increased default risk. “This signals that credit is becoming more expensive,” Ives notes. He points to the Consumer Price Index (CPI) and Credit‑Card Spending chart, which shows that while overall credit‑card usage grew 4.2 % YoY, the growth slowed from 6.0 % in the previous quarter.
Ives also touches on the automotive loan‑to‑vehicle price ratio, a metric that had fallen below 1.0 in late 2024 but is now hovering at 1.05. This suggests that the average cost of a car is outpacing the growth in vehicle prices, putting an additional strain on consumers with auto‑loan obligations.
4. “EBOF” – Earnings Before Operating Costs? – A New Lens
A recurring term in the video is EBOF, which Ives clarifies is an abbreviation used internally at BofA to track Earnings Before Operating Costs for small‑to‑medium‑sized businesses (SMBs). He explains that while SMBs are generally resilient, the current climate of higher operating costs (particularly for energy and payroll) is cutting into margins.
Ives presents a bar chart comparing EBOF growth for the S&P 500’s consumer staples versus its industrial peers. Consumer staples still show a modest 2.3 % increase, whereas industrials are flat at 0.1 %. The implication is that companies that rely heavily on discretionary spending (like electronics and apparel) will see the most significant pressure as consumers tighten budgets.
5. What This Means for the Economy
Towards the end, Ives offers a high‑level forecast. He projects that U.S. GDP growth will slow to 1.8 % in Q4 2025, a reduction from the 2.3 % growth seen in Q3. He attributes this to “the dual drag of higher borrowing costs and a tightening credit market.” He warns that consumer spending—currently around 68 % of GDP—could contract by 1 % if the inflation trend persists, especially in discretionary categories.
Ives also highlights potential policy responses. The Fed could signal a pause in rate hikes if inflation starts to fall below 2 % for two consecutive months. However, he cautions that “any easing would be gradual,” and the markets will likely remain wary.
6. Takeaway for Consumers and Businesses
In closing, Ives offers practical advice for both individuals and corporate planners:
- For consumers: Reassess discretionary budgets, shop for energy‑efficient appliances, and consider refinancing high‑interest debt if rates stabilize.
- For businesses: Monitor EBOF closely, especially if operating in high‑cost sectors. Focus on price‑elastic products that can command a premium.
- For policymakers: The data suggest a need for balanced monetary policy that keeps inflation in check without stifling growth.
The CNN Business video concludes with a side bar that links to the full BofA research note, a downloadable PDF of the CPI data, and a live‑stream of the next “Economic Outlook” webinar that will explore these topics in deeper detail.
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Read the Full CNN Article at:
[ https://www.cnn.com/2025/11/25/business/video/dan-ives-target-pressure-us-consumers-ebof-digvid ]
