Americans under age 50 were more than $9.5 trillion in debt in this year’s third quarter, compared to about $9.3 trillion in the preceding three months, marking the largest quarterly increase since 2022’s fourth quarter, U.S. Federal Reserve data shows.
U.S. inflation is not yet tamed and the U.S. Federal Reserve is more likely to raise interest rates than cut them if any change is needed, Fed chair Jerome Powell said in a 9 November speech to a conference of the International Monetary Fund.
On 23 October, the yield on the 10-year U.S. treasury bond broke up through 5 percent for the first time in 16 years. On 27 October, the average national interest rate on a 30-year, fixed-rate home mortgage topped 8 percent, according to Bankrate. The average credit card interest rate has reached 22 percent, the U.S. Federal Reserve reported.
At the last meeting of the U.S. Federal Reserve’s rate-setting Open Market Committee, a majority predicted the central bank would need to hike rates again when it meets at the end of this month.
Americans reduced their outstanding non-revolving debt, such as auto and student loans, by $30.3 billion in August, according to U.S. Federal Reserve data. The figure represents a 9.8-percent reduction over the previous 12 months.
In one of our Top Trends for 2023, we warned of a Middle East Meltdown. Since that time, as we have reported extensively and now it is right in front of everyone’s eyes, the Middle East is melting down.
Many companies with special needs for cash or less-than-perfect credit profiles borrowed when interest rates were low to keep their financial houses in order. Now that the U.S. Federal Reserve has not only raised rates but also has vowed to keep them aloft for as much as another year or more, those companies are increasingly at risk.
The U.S. Federal Reserve’s message that it will not cut interest rates any time soon has finally convinced investors.
On 21 September, Turkey’s central bank hiked its key one-week repo interest rate by a whopping five percentage points to 30 percent, matching economists’ forecast in a FactSet poll.
Last week, the dollar rose to six-month highs against the euro, pound, and yen after U.S. Federal Reserve officials said the bank expects to keep interest rates higher longer than they had earlier predicted.