Why Your Brain Treats a Recession as a Spending Freeze

Lucas and Luna explore a fascinating cognitive bias: why the mere mention of a recession makes us stop spending, even if we're not personally affected. Drawing on a 2023 study from the Federal Reserve Bank of New York, they unpack how 'recession salience' — hearing the word in headlines — can reduce consumer spending by as much as 2.5 percent, independent of actual economic conditions. They discuss the 2022-2023 'vibecession', where consumer sentiment dropped while GDP grew, and contrast it with the post-2008 mindset shift. Lucas explains the anchoring effect of 'Recession' as a mental budget category, and Luna points out how this affects everything from luxury goods to streaming subscriptions. They also touch on the practical takeaway: how to recognize when your brain is overcorrecting for a fear that may not match your personal finances. Plus, a brief word on how listener support keeps the conversation going at buy me a coffee dot com slash fexingo. #RecessionSalience #ConsumerSpending #BehavioralEconomics #MentalAccounting #Vibecession #FederalReserve #NewYorkFed #CognitiveBias #FramingEffect #Anchoring #PersonalFinance #MoneyMindset #SpendingHabits #EconomicPsychology #Finance #Business #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo