---
title: "The U.S. household debt crisis may erupt:"
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/27460270.md"
description: "To begin with, my personal view is that the Federal Reserve continues to make mistakes. Next week, the U.S. stock market may still face troubles. $Tesla(TSLA.US) Data analysis and interpretation 1. Overview of key data According to data from the New York Federal Reserve, the current household debt situation in the United States presents the following characteristics: Total household debt continues to rise: As seen in the chart, total household debt in the U.S. has exceeded $17.5 trillion and shows a long-term growth trend. Default rates for different types of debt (90 days overdue rate): The default rate for credit card debt is rising rapidly, approaching levels seen during the 2008-2009 financial crisis..."
datetime: "2025-02-23T00:58:10.000Z"
locales:
  - [en](https://longbridge.com/en/topics/27460270.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/27460270.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/27460270.md)
author: "[老板的老板 AI Exec](https://longbridge.com/en/profiles/123.md)"
---

> Supported Languages: [简体中文](https://longbridge.com/zh-CN/topics/27460270.md) | [繁體中文](https://longbridge.com/zh-HK/topics/27460270.md)


# The U.S. household debt crisis may erupt:

### To begin with, my personal opinion is that the Federal Reserve continues to make mistakes. Next week, the U.S. stock market may still face troubles.

### $Tesla(TSLA.US)

### **Data Analysis and Interpretation**

#### **1\. Key Data Overview**

According to data from the New York Federal Reserve, the current household debt situation in the United States presents the following characteristics:

-   **Total household debt continues to rise**: As seen in the chart, total household debt in the U.S. has exceeded **$17.5 trillion** and shows a long-term growth trend.
-   **Default rates by different types of debt (90 days overdue rate)**:
    -   **Credit card debt default rates are rising rapidly**, approaching levels seen during the **2008-2009 financial crisis**.
    -   **Default rates on student loans have significantly decreased**, possibly related to government policies on student loan deferment and some relief measures.
    -   **Mortgage default rates have recently increased significantly**, indicating greater repayment pressure on home loans.
    -   **Auto loan and Home Equity Line of Credit (HELOC) overdue rates remain stable at low levels but are still rising.**

#### **2\. Major Risk Forecasts**

##### **(1) Risk of Soaring Credit Card Default Rates**

-   **Credit card overdue rates are nearing 2008 levels**, indicating increased liquidity pressure on consumers.
-   **In a high-interest rate environment, the burden of credit card debt is heavier**, leading to decreased repayment ability.
-   **Potential impact**: Banks may face higher non-performing loan rates, financial institutions will tighten credit policies, and consumer spending will decrease, thereby affecting economic growth.

##### **(2) Rising Mortgage Default Rates**

-   **The Federal Reserve continues to maintain high interest rates**, resulting in persistently high mortgage rates and increased repayment pressure on homebuyers.
-   **The housing market may face adjustments**; if default rates continue to rise, it could lead to falling home prices, affecting overall confidence in the financial market.
-   **Potential impact**: The real estate market may undergo adjustments, and falling home prices will affect consumer wealth effects, further impacting consumer spending

##### **(3) Auto Loan Risks**

-   **Although the auto loan default rate has not sharply increased, it shows a slow upward trend**.
-   **Adjustments in the used car market prices may lead to asset depreciation risks**, affecting loan recovery rates.
-   **Potential Impact**: The asset quality of auto finance companies and banks is affected, and the auto market may face certain pressures.

##### **(4) Risks from Changes in Student Loan Policies**

-   **Government policies on deferral and forgiveness of student loans have played a role in suppressing default rates**, but the uncertainty of future policies remains high.
-   **If the deferral policy ends, it may lead to a rebound in default rates**.
-   **Potential Impact**: If the student loan default rate rebounds, it may affect the consumption and mortgage capacity of the younger population, hindering economic recovery.

#### **3\. Summary and Investment Recommendations**

**Short-term Risks**:

-   A surge in credit card debt default rates indicates insufficient consumer liquidity.
-   In a high-interest rate environment, rising mortgage default rates may affect the stability of the real estate market.
-   Attention is needed on the non-performing loan rates in the banking sector and how the financial market prices these risks.

**Long-term Risks**:

-   If economic growth slows and the job market weakens, it may exacerbate debt default issues.
-   Changes in student loan policies may lead to new debt pressures.

**Investment Recommendations**:

-   **Avoid financial stocks related to high-debt consumer groups, such as credit card issuing banks and consumer finance companies**.
-   **Focus on industries that benefit from a high-interest rate environment, such as insurance and the bond market (higher-yield fixed income assets)**.
-   **Real estate investments should be approached with caution; if mortgage default rates continue to rise, the real estate market may face adjustments**.

Overall, the debt default situation in the United States is deteriorating, particularly the default rates on credit cards and mortgages, which are worth monitoring. This may impact the financial market and pose challenges to economic recovery. Future attention should be paid to the Federal Reserve's interest rate policies and further changes in consumer credit conditions

### Related Stocks

- [Tesla, Inc. (TSLA.US)](https://longbridge.com/en/quote/TSLA.US.md)

## Comments (25)

- **NEWNIU漫谈 · 2025-02-24T05:27:25.000Z**: Hello boss, where are these data sources from?
  - **老板的老板 AI Exec** (2025-02-24T05:27:48.000Z): Follow for more updates 😄
  - **NEWNIU漫谈** (2025-02-24T06:38:40.000Z): Which platform is more convenient for the boss to check macroeconomic data?
- **沈浪25年 · 2025-02-24T00:26:11.000Z**: Oxy, what does the boss think?
  - **老板的老板 AI Exec** (2025-02-24T01:01:40.000Z): 1. Following Buffett's investment moves is probably a safe bet.2. I won't buy, I don't like Buffett.
  - **沈浪25年** (2025-02-24T01:10:53.000Z): Thank you, boss
- **Andrew Hui · 2025-02-23T17:16:07.000Z**: Will it keep going down?
- **毛脸雷公嘴和尚 · 2025-02-23T11:20:11.000Z**: Is Tesla going to be doomed again next week?
  - **慕容鱼** (2025-02-23T15:04:33.000Z): Well, I think it's very likely, and I still have a sell put.
- **Lucy ling · 2025-02-23T10:30:11.000Z**: Boss, does that mean we need to cut losses and liquidate Tesla's position?
  - **老板的老板 AI Exec** (2025-02-23T11:35:42.000Z): Probably not. I won't sell Tesla anyway.
- **老板的老板 AI Exec · 2025-02-23T03:16:49.000Z**: High interest costs will devour the profits of the private sector, push up the cost of personal (household) consumption, and reduce long-term consumption potential. How can the U.S. dollar offer a 5% annual interest rate? Warren Buffett is sitting on hundreds of billions of dollars in the bank, earn
  - **everLeek** (2025-02-23T03:19:16.000Z): It's too shameless for ordinary people. Are they going to reset credit bonds and restart the server?😂
  - **[已注销]** (2025-02-23T12:04:28.000Z): These operations align with the interests of the United States, essentially squeezing out other interest groups. Strengthening the returns on U.S. foreign lending and increasing interest earnings on l
- **财到我家 · 2025-02-23T02:39:51.000Z**: Boss, does this mean US long-term bonds are going to rise?
- **[已注销] · 2025-02-23T02:28:23.000Z · 👍 2**: You can continue to use your credit card even if you default, because there are no state-owned enterprises in the U.S. in name, and debt collection is not allowed. They can only notify you three times. If the number of notifications exceeds this limit, the user can appeal to the court, which may res
- **[已注销] · 2025-02-23T02:19:10.000Z**: The possibility of a financial crisis like 2008 is unlikely. With trillions of dollars printed, the real estate market could rise for over a decade, similar to China's. Currently, renting in the U.S. is more expensive per month than taking out a mortgage to buy a home.
  - **everLeek** (2025-02-23T03:14:11.000Z): The yield of US Treasury bonds is too high, and ordinary people are suffering.
  - **[已注销]** (2025-02-23T11:59:32.000Z): Banks made money.
- **everLeek · 2025-02-23T01:58:34.000Z**: Keep reviewing your portfolio
- **X6PMCe · 2025-02-23T01:53:56.000Z**: Gold hits a new high🤪
- **輸棟樓的韭菜 · 2025-02-23T01:51:01.000Z · 👍 2**: The risk of stagflation is high, but not as high as during the interest rate hike cycle in the past two years when it surged. It's at a level where you should keep an eye on it but can afford to wait and see.
- **糖糖糖（升级版） · 2025-02-23T01:37:56.000Z**: So scary, should we buy US Treasury bonds to hedge?
- **发财机 · 2025-02-23T01:02:04.000Z**: The boss is not going out to have fun on the weekend.
  - **老板的老板 AI Exec** (2025-02-23T01:39:17.000Z): Rest and store energy