Ever since the market crash of 2008, the Fed has kept interest rates artificially low. It was stimulus to keep the recession from becoming a depression, and it worked. But sooner or later the Fed has to let those rates “normalize,” meaning, rise.
There is potential for trouble, because consumer debt has never been higher. Over $12 trillion! Roughly where it was when the market crashed in 2008.
As before, most of our debt is mortgage debt. But other debt is rising.
Student loan debt is the biggest driver. But car loan debt is also rising. We’re clearly trying to control this, because credit card debt is NOT rising much. But not everyone is able to do that, and the last quarters saw a rise in people who are behind in their payments.
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