Depending on economic religion, one should consider what the rise in interest rates mean for economy.
It is not like consumer is giving up its spending habits completely, just the weakest are dropping off the wagon of lust.
While the savings rate is still below long-term equilibrium and will eventually have to rise toward 7%, there are many ways of getting there: lower consumption, higher income, lower effective tax rates or lower interest payments. In a best-case scenario, we will get there via income growth, which would allow consumption to grow modestly at the same time (with income being subsidized by exports). This scenario is implicitly embedded in the current consensus thinking, and fully supported by current policy efforts.
Income growth, which would allow consumption to grow modestly is a consensus thinking? Fully supported by current policy efforts ...