FX168 Financial News (Asia Pacific) News ZeroHedge, a well-known financial blogger, said that although credit card interest rates hit a record high, US consumer debt experienced sharp fluctuations for several months, which eventually led to credit card debt jumping to a record high last month. Meanwhile, personal savings rates have reached record lows.

The article mentioned that before reality finally arrived, there were so many cases of credit card bursting, as shown in the figure below, which is probably the most compelling chart so far.

(Source: ZeroHedge)

US non-revolving credit increased slightly by $6.1 billion, up slightly from $4.3 billion in February, which is exactly 50% of the average monthly increase in non-revolving credit of $12.2 billion in February.

ZeroHedge explained, “This was to be expected because US President Joe Biden's administration illegally cancelled debts, leading to continued reduction in student debt.”

“The Biden administration has ignored the Supreme Court and continues to waive billions of dollars in student loans, while auto loans have hardly increased rates due to record interest.”

“The biggest shock in the current data is the absolute collapse in revolving credit growth, which plummeted from an increase of $10.7 billion in February to barely positive, or $152 million, the smallest monthly increase since the COVID-19 pandemic plummeted.”

“Of course, since the Federal Reserve has good reason to refuse to cut interest rates, it's not surprising that new credit card debt has slowed sharply, because the Federal Reserve also reported that the average interest rate on all credit card amounts in all commercial banks just hit a record high of 21.59% in the first quarter.”

“This is a vivid reminder that while banks are happy to raise credit card interest rates, they rarely lower interest rates, which is one of the main reasons why Goldman Sachs trading is bearish on American consumers.”

However, as the US personal savings rate fell from more than 5% to 3.2% in just a few months, the lowest level since 2022, consumer demand for real cash and stocks became increasingly tight.

ZeroHedge warned: “Then again, as the US November presidential election approaches, the election will ensure that any credit card stimulus spending must be encouraged.” #美国大选 #

“Don't be surprised if the White House instructs banks to ignore soaring delinquency and write-off rates.”

“As discussed before, the hammer fell on the new president's first day in office.”