New York Fed: Credit Default Fears Rise to Highest Level Since April 2020
Long-term inflation expectations among Americans have increased; 1-year outlook stable at 3%, 3-year up to 2.7%, and 5-year to 2.9%.
Fears of credit defaults have reached the highest levels since April 2020, with the average probability of defaulting on debt rising to 14.2%.
The increase in default risk expectations is most notable among households earning less than $50,000, but higher earners (over $100,000) also reported increased concerns.
Fed Governor Christopher Waller noted that recent economic data did not indicate a significant growth slowdown, which complicates decisions on interest rate cuts.
