As of 8/14/2023 – National Consumer Debt

 Credit Card Debt Eclipses $1 Trillion

Credit card balances hit a high of $1.3 trillion in Q2, up nearly 5% from Q1, according to the Federal Reserve Bank of New York in its quarterly report on household debt and credit. In total, total household debt is at just over $17 trillion, with mortgage balances accounting for 70% of that.

Lower Rates Dictate Behavior

As current rates continue to rise, the bulk of outstanding corporate and consumer debt are locked in at lower rates. According to the Federal Housing Finance Agency National Mortgage Database, 80% of homeowners with mortgages still have a rate below 5%, with nearly 25% of borrowers enjoying a sub-3% rate.

 Corporate Debt

U.S. companies are barreling toward a $1.8 trillion wall of maturing corporate debt. As this debt matures, companies will need to take out subsequent loans at the current, much higher rates.

 In the meantime, while companies and consumers continue to enjoy their existing lower rates and the economy remains strong, we can expect the Fed to keep current rates high.