10/08/2024
www.YuliaBrown.SupremeLending.com
What You Need to Know
Consumer borrowing in the U.S. rose in August at a reduced pace from July, according to a report released by the Federal Reserve yesterday. Total outstanding credit increased $8.9 billion in August after jumping a revised $26.6 billion in July, the largest increase since late 2022. Economists had been expecting a $12 billion rise. Outstanding revolving debt, which includes credit cards, fell by almost $1.4 billion. Non-revolving debt, including auto loans, rose $10.3 billion. The report showed that borrowing rates for credit cards rose to a record 23.37% and that an average 60-month new car loan rate rose to 8.4%. Separately yesterday Federal Reserve Bank of Minneapolis president Neel Kashkari repeated that he supported the large 50 basis point rate cut at the last Fed meeting despite the recent string of strong economic reports. Kashkari told a gathering in Edina, Minnesota that “I supported the decision because we made a lot of progress on inflation and because the labor market is showing some signs of weakening.” Treasuries sold off again yesterday, with the benchmark U.S. 10-year note losing 15/32 in price to finish the trading session with a 4.03% yield, the first close above 4.0% in two months. This morning the National Federation of Independent Business (NFIB) reported that its small business index inched up 0.3 points to 91.5 in September after posting the biggest drop in more than two years in August. While the share of firms that reported they had job openings they could not fill fell to 34%, the smallest share since early 2021, a net 15% of small businesses said they plan to create jobs in the next three months, up two percentage points from the prior month. The Commerce Department reported this morning that the U.S. trade deficit narrowed 10.8% in August from the prior month, roughly in line with consensus estimates. The value of exports rose by 2.0%, while imports fell 0.9%. Longer-term Treasury yields are higher this morning and current-coupon MBS prices are 5/32 worse than yesterday’s close in early trading.
