SFA Research Corner: Subprime Borrowers Caught Between Economic Tides

Inflation remained steady in October, with headline CPI rising 0.2% month-over-month and core CPI up 0.3%, both in line with expectations. Year-over-year, headline inflation reached 2.6% while core inflation stood at 3.3%. Despite easing inflationary pressures, subprime borrowers continue to face financial strain, as S&P reports subprime auto loan delinquencies reached 16.05% in September, driven by higher rates and larger payments. Credit markets, however, remain optimistic, with narrowing corporate bond spreads reflecting hopes for President-elect Trump’s pro-growth policies.