Despite mounting debt loads and rising delinquencies, U.S. consumers are not yet overwhelmed. In the fourth quarter, household debt hit a record $17.5 trillion, but adjustments for inflation and income growth indicate it's still below historical peaks.
Sales of annuities, financial products often purchased by consumers approaching retirement age, hit a record $385 billion in sales in 2023 with higher interest rates promising larger potential monthly payments to policyholders.
On February 14, the House Financial Services Committee (HFSC) held a hearing, titled “Oversight of the Financial Crimes Enforcement Network (FinCEN) and the Office of Terrorism and Financial Intelligence (TFI)” with Department of Treasury officials.
According to Reuters, U.S. banks issued an estimated $7 billion in credit risk transfers (CRTs) in 2023, protecting against the risk of losses on mortgage and auto loans, and on corporate loans which are expected to see more capital charges under proposed Basel rules.
Despite a trend of stricter standards in the 4th quarter for most loan types, the January 2024 Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) indicated a decrease in the number of banks tightening lending standards compared to the previous quarter, across all loan types.
Acknowledging that economic indicators are improving, the Federal Open Market Committee (FOMC) unanimously maintained the current federal funds rate at 5.25-5.5 percent and reiterated its commitment to reduce balance sheet holdings of Treasury and Agency mortgage-backed securities.