September 2024 recorded 21 rate cuts, the highest since March 2020’s 49 cuts.

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The alarming rise in the share of consumer debt deemed unlikely to be collected by banks has more than doubled over the past two years, reaching 3.0% in 2024. This figure represents the highest level seen in 13 years, highlighting the significant financial strain consumers are currently facing. Such a dramatic increase not only indicates personal financial difficulties but also raises questions about the overall health of the economy, as consumers struggle under the weight of persistent inflation and rising household debt.

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Historically, during the Financial Crisis, the share of uncollectible consumer debt surged from 2.5% in 2007 to a staggering 6.1% in 2010. The current increase to 3.0% serves as a warning sign of ongoing economic challenges that could lead to deeper financial issues. With inflation continuously eroding purchasing power, many households are forced to rely more on credit to meet basic needs. This situation could lead to higher default rates and further economic instability if not addressed promptly.

Sources:
https://www.marketwatch.com/guides/banking/american-debt-2024/

https://www.newyorkfed.org/newsevents/news/research/2024/20240514