Inflation is down, the CPI is behaving, and every central bank podium is celebrating the soft landing. Meanwhile, consumer credit card delinquencies just hit a decade high, auto loan extensions are at record volume, and the savings cushion that kept households afloat through 2023 and 2024 is gone.
The lag between the headline number and the household balance sheet is where the next phase of this cycle is hiding. Inflation was the fever. The hangover is the two years of depleted savings, maxed-out credit lines, and adjustable-rate debt that is about to reprice into a world that doesnβt look anything like the one people borrowed into.
