Some 3.6% of debt was delinquent in the final three months of 2024, the most since the second quarter of 2020, the New York Fed said Thursday in its Quarterly Report on Household Debt and Credit. Total household debt — which is primarily composed of mortgages, student loans, auto loans and credit-card balances — rose 0.5% to a record $18 trillion.
Is the US consumer tapped out?
Interest rates won’t be declining soon.
Prices on goods will increase as tariff war begins in earnest.
We have been on the cusp of a recession for a while. Imbalances in the economy are keeping the economy looking like it can keep on keepin on.
The constant attempt to control growth will come back to bite. With assets in bubble valuations, higher rates, high debts, stagnant wages, trade wars, resuming inflation, and now a large government layoff…we are close. What happens when all of the government workers can not find a job again in a tighter labor market…the start of a recession.
Delinquency rates on Federal Housing Administration and Veterans Affairs loans reached 11.03% and 4.7%, respectively, at the end of last year, according to the Mortgage Bankers Association, breaching pre-pandemic levels.
A full-fledged trade war will likely weigh on export demand and overseas profits of multinational firms. At home, inflation remains sticky and the Federal Reserve appears in no rush to cut interest rates.