data indicate large information frictions in the acquisition and processing of information about macroeconomic factors, such as inflation (Armantier et al., 2016; Malmendier and Nagel, 2016; Cavallo, Cruces, and Perez-Truglia, 2016, 2017), home prices (Armona, Fuster, and Zafar, 2019; Fuster et al., 2020; Bottan and Perez-Truglia, 2020b), and GDP growth (Roth and Wohlfart, 2020). Growing evidence shows how these expectations are formed. Less is known, however, about whether individuals actually factor macroeconomic expectations into their consumption decisions (Bachmann, Berg, and Sims, 2015; Armantier et al., 2015; Coibion et al., 2019; D’Acunto et al., 2019; Bottan and Perez-Truglia, 2020b). For example, Bachmann, Berg, and Sims (2015) shows that inflation expectations and survey measures of readiness to spend are not positively correlated. And Coibion et al. (2019) present evidence from a survey experiments that, if anything, inflation expectations have a negative impact on durable spending.

We contribute to this literature in two ways. We are the first to measure the impact of expectations on actual, rather than self-reported, consumer behavior using detailed administrative data on credit card spending. This exercise overcomes several limitations specific to survey data, such as measurement error or experimenter demand effects. Indeed, we provide direct evidence that the concerns about survey data should be taken seriously, as we document a weak correlation between self-reported spending plans and the corresponding actual spending decisions. Second, we add to this line of research by studying exchange rate expectations. In recent years, inflation rates have been low and stable in most of the world and are thus arguably of little importance for most households. In contrast, large fluctuations in the nominal exchange continue to be commonplace around the world and have meaningful economic consequences for many households (Gouvea, 2020; Cravino and Levchenko, 2017). Despite the economic importance of exchange rates, there is little evidence on how households form exchange rate expectations and how such expectations may affect consumption decisions.

This study also relates to a literature on household finance and the impacts of consumer expectations on personal financial decisions. Giglio et al. (2020a) and Giglio et al. (2020b) use survey data to test how macroeconomic beliefs affect the decisions of retail investors. They show that beliefs are reflected in asset allocations and change in response to discrete macroeconomic events, such as a stock market crash. Aaronson, Agarwal, and French (2012), Agarwal, Liu, and Souleles (2007), and Agarwal and Qian (2014) use credit card data to test consumer responses to minimum wage increases, tax changes, and unanticipated income shocks and find effects inconsistent with models of fully rational expectations.<sup>4</sup> We make both an empirical and methodological contribution to this literature. On the empirical side, we merge information on consumer beliefs, as elicited via survey, with rich administrative data that covers the universe of credit card transactions. On the methodological side, we generate exogenous variation in beliefs

> 4. Related evidence shows that behavioral factors, such as social norms and conspicuous consumption, affect spending and debt repayment decisions (e.g. Bursztyn et al., 2018; Bursztyn et al., 2019)

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