Rising oil prices, food prices and interest rates are likely to soon start taking a toll on the US consumer. Over the last year, gasoline prices are up 28%, the price of cornerstone crops like corn, soy and wheat are up between 5-16%, credit card interest rates have moved to an eight year high of 13.6% and the all important mortgage rate has risen to nearly 5%. But the reason price growth in staple items/rates is now so important is because the US household savings rate has moved from 10% to just 3% since 2012. This means that the margin of safety, or households’ ability to absorb tightening of financial conditions, is severely limited relative to even a few years ago. Absent a move higher in wages, commodity and rate inflation are likely to continue to force the savings rate toward the historic lows.