- June 10, 2022
- Posted by: Stratford Team
- Category: Economy
Investors might be about to find out what happens after a “Golden Age” of consumer credit.
Following a period of “explosive growth” in consumer credit, the nearly $1.6 trillion U.S. bond market tied to car loans, credit cards, student debt and even cellphones has begun to see liquidity deteriorate, according to Joseph Kalish, chief global macro strategist at Ned Davis Research.
During volatile stretches, like the start of 2022, liquidity in parts of debt markets have been prone to drying up.
Issuance of new “asset-backed securities” exploded last year after a brief pandemic pullback, and so did trading volumes, according to Kalish. But the tone recently has shifted, including with Wall Street dealers becoming less willing to commit capital to the sector (see chart).
