Everything is tightening up, creating a snowballing domino effect.

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“US consumers’ outlook on their longer-term financial situation has deteriorated to the worst level in over a decade.”

“It’s a bull market in bankruptcies.

Q2 data on chapter 11 bankruptcy filings shows 2,462 defaults among U.S. corporations, which is the highest level since 2012.

The default rate began moving steadily higher following the start of the Fed’s rate hiking campaign in Q1 2022.

Monetary policy acts with a lag, and U.S. corporations are now feeling the full brunt of higher borrowing costs.

Likewise, it will likely take many months and a series of additional rate cuts before the Fed’s shift to an easier monetary policy offers any relief.

While the stock market seems unconcerned for now, surging default rates typically occur closer to the end of a bull market rather than the beginning.”

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