Credit card delinquency rates keep rising

About 8.5% of credit card balances and 7.7% of auto loans moved into delinquency in the fourth quarter of 2023, the Federal Reserve Bank of New York reported last week. “Credit card and auto loan transitions into delinquency are still rising above pre-pandemic levels,” said Wilbert van der Klaauw, economic research advisor at the New York Fed. “This signals increased financial stress, especially among younger and lower-income households.” Total household debt increased by $212 billion last quarter to $17.5 trillion

Powell refused to rule out recession yesterday and today markets sell off

Powell refused to rule out recession yesterday and today markets sell off

Yesterday, Fed chair Jerome Powell in his post-Fed-meeting press conference said that a recession in 2023 isn’t inevitable. Growth will stay positive next year, he continued, although “it’s not going to feel like a boom.” How much isn’t it going to feel like a boom? The Fed’s Dot Plot projections, updated for this meeting, predict 0.5% growth in U.S. GDP for 2023. That’s down from the 1.2% growth projected in the September Dot Plot. In 2024, the Fed said, growth will speed up to 1.6%, still not exactly a boom. In September the Fed projected 1.7% growth for 2024. And it will feel like a recession to many people.

If bad news from China, Japan, the Ukraine can’t sink U.S. stocks, is the trend still to the upside?

Slower than expected growth in Japan? A plunge in Chinese exports? The Russian occupation of the Crimea and worries about the dismemberment of the Ukraine? The Standard & Poor’s 500 has pulled back from record highs but we’re not talking about a big plunge here. As of 2:30 p.m. New York time today the S&P 500 was down just 0.42% to 1869.