With this kind of demand, it’s hard to imagine that inflation will just vanish.
Powell said many times consumers can take tightening because loan distress is at historic lows. What consumers cannot take for long is raging inflation.
Auto-loan balances surge on sky-high prices, despite sales plunge. Delinquencies rise to pre-pandemic lows, subprime delinquencies return to 2016-2019 levels.
Credit cards mostly a payment method, paid off monthly. Importance for borrowing declined over the years.
And after five months of declines, government consumption and investment rose again.
The Fed, which is trying to slow demand to tamp down on consumer price inflation, gnashes its teeth.
Credit-score inflation throws a monkey wrench into the calculus of credit risk.
Spending on gasoline plunges due to plunge in price. “Real” spending on durable goods, amazingly, jumps for 2nd month. Services spending rises but stuck below pre-pandemic trend.
Over the decades, recessions were preceded by spikes in unemployment claims. We keep our eyes on them as the recession watch has begun.
The educational-industrial complex is laughing all the way to the bank.