Investing.com -- Macquarie analysts remain cautiously optimistic about the domestic consumer following their 10th Annual Consumer Bright Ideas Conference, highlighting that declining interest rates could serve as a tailwind in the second half of the year.
"Following our 10th Annual Consumer Bright Ideas Conference, where we had ~20 consumer companies present, we remain cautiously optimistic regarding the domestic consumer," said Macquarie.
While February was impacted by weather and calendar shifts, they noted that March consumer behavior returned to stable or even healthy levels.
Macquarie said 55% of companies met or beat fourth-quarter earnings expectations, and while 2025 Regional EBITDA estimates declined by 0.5%, the higher debt leverage within their coverage universe historically outperforms during periods of declining interest rates, which could provide support in the latter half of the year.
“Declining interest rates could act as a 2H tailwind,” stated the firm.
Macquarie noted that it is monitoring potential risks, including declining savings rates, rising credit card delinquencies, high interest rates, and more, but highlighted that it did not walk away from the conference with any alarming takeaways.
The firm concluded that historically, given the higher levels of debt leverage, its coverage universe generally outperforms during declining interest rate periods. As a result, they feel rates continuing to head lower could provide a boost for consumers into the second half of the year.