The Strategist

US Fed is concerned about nation’s debt overburden and delinquencies

02/22/2024 - 06:29

According to a report released on the outcomes of the regulator's most recent meeting, the Federal Reserve System (the Fed) of the United States is worried about the population's rising debt and past-due loans because they perceive them as a threat to the level of economic consumption.

Daniel Foster
Daniel Foster
"A number of participants drew attention to signs that household finances, especially those in the low- and middle-income categories, are increasingly under pressure, which is seen as a risk of worsening prospects in consumption levels," the document reads.

The Fed noted rising credit card balances and credit extension services used for purchases, together with rising consumer loan delinquencies.

The Federal Reserve Bank of New York announced at the beginning of February that household debt in the United States at the end of 2023 had hit a new all-time high of $17.5 trillion.

Concurrently, debt related to credit cards increased by $50 billion to $1.13 trillion, mortgages increased by $112 billion to $12.25 trillion, and debt related to vehicle loans grew by $12 billion to $1.61 trillion.