In the intricate dance of economic indicators, a concerning melody emerges. Personal interest payments, now exceeding the $550 billion mark, cast shadows in a backdrop where the Federal Reserve has orchestrated unprecedented rate hikes. As the Fed signals intentions to keep rates elevated, credit card interest rates spike to a staggering 21.47%, intensifying the financial squeeze on consumers.
What’s even more disconcerting is the resurgence of serious delinquencies in credit cards and auto loans among the most productive cohort, aged 19-39. The echoes of the Great Financial Crisis reverberate as these delinquency levels reach heights not seen in years. It’s a stark reminder that beneath the veneer of economic optimism, storm clouds are gathering.
Amidst this tumult, January’s consumer confidence registers a surprising two-year high. But, as we delve deeper, the gains are disproportionately concentrated in the 55+ age group. Why? Perhaps, they’ve found solace in a late rally salvaging their retirement accounts. But can this optimism endure? The answer lies in the Federal Reserve’s ability to artificially boost reserves and sustain the facade of economic strength.
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Furthermore, credit card and auto loan serious delinquencies for the most productive cohort (19-39) have been rising to levels not seen since the Great Financial Crisis.
It does not look like healthy for the US consumerst.co/AMAfLzE4bT
— Global Markets Investor (@GlobalMktObserv) January 31, 2024
Jan consumer confidence jumps to 2-year high
Biggest gains by age group? 55+
Why? B/c they've watching their inflation-adjusted retirement accounts get clobbered but the late rally has made them feel better
Can it last? Only as long as Fed keeps artificially boosting reserves… pic.twitter.com/lfv6FX25EY— E.J. Antoni, Ph.D. (@RealEJAntoni) January 30, 2024