Getting some breaking news out of the New York Fed. For that, we'll turn to Steve Leeman. Morning, Steve. >> Morning, Carl.Household debt, the third quarter New York Fed household debt and credit report, household debt uh balances rising uh by 197 billion. Call it 200 billion to 18.6% trillion. Uh that's a new record, but up only modestly.Mortgage and student loan and credit card debt all rose modestly. He locked debt up a little bit uh more actually a little bit elevated but auto loan debt which we've been ...

Credit Market Concerns - Credit issues are a persistent driver of bank returns and should not be ignored [1] - Lower-end consumers are experiencing financial stress, with rising delinquencies in car loans for lower credit quality borrowers [2] - High yield spreads are at historically tight levels, indicating investors are not adequately compensated for the risk [2] - The prevalence of issuing pay-in-kind zero-coupon bonds suggests companies lack sufficient cash flow to service their debt [3] - Private credit, characterized by fewer covenant protections and tighter spreads than traditional bank debt, poses a risk [3][4] - New private credit lenders may be vulnerable as they haven't experienced a full debt cycle [5] - Exposure is anticipated in private credit due to less secured products and weaker covenants compared to traditional high yield public debt [6] - The Hispanic community's reduced spending, potentially due to external concerns, is impacting the economy [7] - Public markets are trading at high valuations based on positive sentiment, making them susceptible to negative shifts in sentiment [9] Market Strengths - The stock market's strong performance is primarily driven by large, financially robust companies [9][10] - Major banks are more focused on high-net-worth individuals, reducing their exposure to lower-end consumer risks [11] - The credit markets are generally in good shape, except for the private credit sector [12]

Household Debt Overview - Household debt increased by 1% to $18.4 trillion [1] - Overall delinquency rates remain relatively modest, excluding student loans [2] Delinquency Rates - Auto loan and credit card debt delinquencies remain elevated [1] - Student loan debt that is 30-day delinquent surged to 13%, previously 1% in Q4 during the forbearance period [2] - Credit card agencies are reporting delinquencies around 13%, up from 8% in Q1 [2] - 90-day mortgage delinquencies increased to 1.3%, the highest level since Q4 2016 [3] Potential Economic Weakness - Potential economic weakness is a concern regarding student debt and its knock-on effect on credit card issues and credit reporting [3]