The Fed's worst nightmare is coming true. It still needs to fight inflation, but higher rates are exposing vulnerabilities in the financial sector and threatening stability. How well the economy weathers any financial shock will depend on how resilient households are. And data from the NY Fed shows they are getting weaker after a few years of inflation; credit card balances are increasing and so are other forms of debt.
Source: New York Federal Reserve
Allison Schrager is a senior fellow at the Manhattan Institute. Follow her on Twitter here.
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