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.
This raging inflation will keep dishing up a lot more surprises.
Deficits didn’t matter – until raging inflation brought the bond vigilantes back to life.
BOE is caught between 10% inflation it needs to crack down on with rate hikes & QT and a crisis over derivatives that leveraged UK pension funds blew their brains out with.
Higher Yields Solve “Liquidity” Problems.
The Fed will tighten “Until Something Breaks” and then pivot? Wait a minute…
It wasn’t big hedge funds that blew up, but £1.5 trillion in leveraged pension funds. BoE stepped in to bail them out and prevent further contagion.
Wealth of the “Top 0.1%” drops by $12 million per household; the wealth of the “Bottom 50%,” who have nearly nothing, rises.
Bank of England: won’t “hesitate” to hike rates “as much as needed.” Bond market fears much higher inflation and interest rates, for much longer.