Chapter
The Risks of Rising Consumer Credit
40:22 - 46:32 (06:09)
The rise of rising revolving and variable consumer credit, coupled with an increase in rates, has the potential to outpace the ability of consumers to pay off their debts, particularly when asset values are down. The key economic question is whether income gains will outpace debt service increases for consumers.
Clips
Despite a great job market and high inflation, the biggest risk is still the rising consumer credit balance, especially in a high-interest rate environment.
40:22 - 42:30 (02:07)
Summary
Despite a great job market and high inflation, the biggest risk is still the rising consumer credit balance, especially in a high-interest rate environment. That being said, credit card debt is still below pre-pandemic levels.
ChapterThe Risks of Rising Consumer Credit
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The increasing rate of debt and consumer credit, along with the climbing interest rates may surpass the income and asset value gain of the consumers, leading to defaults and economic decline.
42:30 - 46:32 (04:01)
Summary
The increasing rate of debt and consumer credit, along with the climbing interest rates may surpass the income and asset value gain of the consumers, leading to defaults and economic decline. The question remains whether the income gain or the asset value gain will outpace the increase in monthly debt service needed for consumers.