🔥#Inflation expectations mixed in November

📈1-yr ahead: 4.7% (+0.1pt)
⚠️Up 1.9pt since Dec '24
⚠️Down from 6.6% in May

📉Next 5-yrs: 3.6% (-0.3pt)
⚠️Up 0.6pt since Dec '24

❔Direction of travel is telling (#tariff concern & salience) but levels largely insignificant

K-shaped economy

✅Consumers with the largest tercile of stock holdings posted a notable 11% increase in sentiment, supported by continued strength in stock markets

⚠️Bifurcated economy

The transition rates into severe #delinquency for auto loans and credit card debt illustrates the much greater stress on household finances for the 18-29 year-old, and the 30-39 year-old

⛔️Transition rates into severe delinquency (+90 days) stable but elevated

💳Credit cards: 7.1% 🆚5.3% pre-Covid
🚗Auto loans: 3.0% 🆚 2.4% pre-Covid
🏠Mortgages: 1.3% 🆚 1.2% pre-Covid
👩‍🎓Student Loans: 14.3% 🆚 9.2% pre-Covid

💳Credit card debt is concerning:
⚠️12.4% of balances in severe delinquency (+90days)
⚠️highest since 2011

🚗Auto loan delinquencies are concerning:
⚠️5% of balances in severe delinquency (+90days)
⚠️highest since 2020 & 2011 before that

🚨Around 8mn student loan borrowers either past due or in default

▶️Department of Education & Treasury began collection efforts for defaulted loans in May
▶️Garnishment of wages, tax returns & Social Security payments
▶️Credit score declines
▶️Lower access to credit

As a reminder, one in four student loan borrowers were behind their payments as of Q1.

As of Q3, one in ten is +90days delinquent

libertystreeteconomics.newyorkfed.org/2025/05/stud...

👩‍🎓Payments on federal student loans were paused from early 2020 through Sep '23

📉During this time, delinquency rate on student loans fell to <1%

💰Payments then resumed with a 1yr on-ramp until Oct 2024. Bank reporting resumed in Q1 '25

⚠️9.4% (~$155bn) are +90days delinquent