As an investor, it’s crucial to stay informed about economic trends that can impact your portfolio. Inflation is a topic that has been taking center stage lately, with Federal Reserve Bank of Minneapolis President Neel Kashkari acknowledging that the public “viscerally hates high inflation.” This sentiment is shared by many, as inflation affects everyone regardless of their tax bracket.
A recent report from the St. Louis Federal Reserve highlights the concerning trend of rising credit card delinquencies across America. Initially, the poorest Americans were hit the hardest, but now even those in higher tax brackets are struggling to keep up with their bills. Delinquencies have been on the rise for the past eight to 11 quarters, with every region in America experiencing an increase of at least 32.2% in delinquencies.
What’s particularly alarming is that the richest 10% of ZIP codes are seeing the highest proportional increase in delinquency rates, climbing from 4.8% to 7.4% in the span of just two quarters. On the other hand, the poorest 10% of ZIP codes saw their delinquency rate increase from 14.9% to 21% during the same period. These numbers paint a stark picture of how widespread the issue of credit card delinquencies has become.
The Fed is warning that these delinquencies are exceeding pre-pandemic levels, signaling that a trend predating the pandemic has only intensified. As people struggle to make ends meet and witness their quality of life declining, it’s no surprise that discontent is on the rise. This discontentment is fueling political upheaval, as people feel increasingly disconnected from their government.
Ultimately, these delinquencies will have repercussions for banks, highlighting the ripple effect of reckless spending and rising taxes. It’s a sobering reminder that decisions made at the policy level can have far-reaching consequences for individuals across all income levels. As investors, it’s important to keep a close eye on these economic indicators and adjust your strategies accordingly to navigate uncertain times effectively. Stay informed, stay proactive, and stay ahead of the curve with Extreme Investor Network.