According to data from the American Farm Bureau Association, the average cost of a Thanksgiving dinner for 10 people is down for the third year in a row. In 2022, the price peaked at $64.05 and has since declined each year, with the 2025 average now at $55.18.
NOT THE WHOLE STORY ON INFLATION
While overall inflation remains sticky around 3%, we’re starting to see signs of stabilizing prices in key areas for consumers, such as shelter and energy. Certain parts of the Consumer Price Index (CPI) have even experienced year-over-year deflation, or an outright drop in prices. Still, overall prices remain well above pre-pandemic levels. From a total CPI standpoint, what we’re experiencing is “disinflation,” not “deflation.”
Disinflation simply means the rate of inflation is slowing, but prices themselves aren’t falling. I think that’s an important distinction that often frustrates people about the inflation narrative, and we’ve seen this show up clearly in consumer sentiment data. According to the latest University of Michigan survey from October, consumers as a whole are reportedly more pessimistic right now than they were during the Great Financial Crisis.
I have a hard time believing that’s truly the case. Back then, the stock market was down nearly 50%, unemployment was spiking, and fear was widespread. Today, we’re only a few percent off all-time highs in the market, and while unemployment has ticked up slightly, it’s still well below historical averages. Based on the data, it’s hard to believe the population as a whole feels worse off now than they did back then.
WHAT THIS COULD MEAN FOR MARKETS
While we’re not rooting for pessimism, it’s often a positive sign for markets. Bull markets typically end with excessive optimism, not with the kind of caution we’re seeing today. I don’t believe we’ve seen peak euphoria yet when it comes to the AI investment trend.
There have also been some signs of weakness in the labor market. Several Federal Reserve officials have come out publicly in favor of additional interest rate cuts to support employment, even at the risk of slightly higher inflation. It’s also worth noting that it’s rare for a bull market to end during a Fed rate-cutting cycle like the one we’re in now.
Altogether, we still believe the most likely scenario is that the secular bull market, which began emerging from the financial crisis, could continue for several more years. The AI infrastructure buildout remains a powerful driver, supported by both fiscal policy (tax cuts) and monetary policy (lower interest rates).
