‘Bond King’ Bill Gross predicts American consumers will run out of cash later this year, paving the way for a recession

• American consumers are on track to run out of cash later this year, Bill Gross has warned.
• Consumer spending is a key driver of economic growth. If it drops, a recession might be the result.
• Gross said the government’s aggressive spending during the pandemic is still buoying the economy.

American consumers are propping up the economy by spending their pandemic savings, but they’re likely to run out of cash later this year, Bill Gross has warned. 

“It’s fiscal policy not just monetary policy — stupid,” the billionaire investor tweeted on Monday. His point was that government spending and tax rates, along with interest rates and money supply, affect economic growth and inflation.