The Federal Reserve’s (Fed) schedule to reduce its balance-sheet, known as quantitative tightening (QT), is ramping up through September and possibly ending in early 2025.

According to American Banker, banking executives were “largely positive” about the credit health of their mostly prime borrowers, while nonbank lenders with nonprime portfolios were less enthusiastic.

As Auto Finance News noted on July 29, the cost of funds in Auto ABS should be increasing, with the increasing risk of a recession, and had been through prior weeks.

Undaunted by inflation and recession risk, credit-card issuers have allocated more funds to marketing and promotional expenses, have attracted new customers and are hoping to see increases in account balances.

Voyager Aviation, an aircraft management and leasing firm based in Dublin, has announced its intention to venture into ABS with an initial offering of $600 to $750 million in 2023.

A recent Fitch Ratings report finds that most U.S. airports are reaching pre-pandemic passenger trends despite COVID-19 variants earlier this year. Since its last report, Fitch has revised its rating outlook for nearly all domestic airports from negative to stable. Increased debt issuances are also signaling a return to normality with many airports already coming to market in 2022.

On May 17, Federal Reserve Chair Jerome Powell in a Wall Street Journal interview stated he is committed to taking interest rates as high as necessary to get inflation headed in the direction of the central bank's 2% target. This comes after earlier this month, the Fed raised benchmark borrowing rates by half a percentage point, the second increase of 2022 as inflation reached around a 40-year high. Fed officials continue to stress that the rise in inflation is only temporary.

In its semi-annual report, published May 5, the Federal Reserve took a cautionary tone in describing the dramatic changes since its last report in November 2021, citing human and economic hardship due to the Russian invasion of Ukraine, the spread of the COVID Omicron variant and inflation that has been higher and longer than anticipated as elements of the vulnerabilities of the U.S. financial system.

The NAHB monthly index, released April 18, dropped for the third month to 2 points below March. Two of the measures’ three components showed a marked decline, particularly the outlook for traffic of prospective buyers which fell to 60 points from 66 points in March, with analysts noting that the housing market is highly interest rate sensitive.

Speaking to the Council on Foreign Relations April 17, St. Louis Federal Reserve Board President James Bullard reiterated the Federal Reserve target of 3.5% interest rates by year-end with half-point hikes, mentioning the Taylor rule and the 1994 hike of 75 basis points.