Since the Fed started raising rates in March 2022, default rates have gone from 1% to 5%+
Source: Apollo, TME
Below the average 3-month ATM implied volatility (max/min range since 2008)
Source: TME, GS
Something to keep in mind for 2024?
Source: Michel A.Arouet
This level was last seen during the Financial Crisis
9% of bonds are due to mature within the next 2 years. High interest rates will make it harder to refinance. Source: Game of Trades
Interest rate on credit card debt has risen to 21.19%
To put this in perspective, this rate was at 14.56% in early 2022. That’s a 6% + jump in less than 2 years. Current levels have NEVER been seen in over 25 years. This is happening at a time when credit card debt has crossed the $1 trillion threshold. To make things worse, personal interest payments have crossed $500 billion. Source: Game of Trades
Ahead of Fed minutes... The market is now pricing in a 0% probability of a rate hike in December and rate cuts starting in May 2024
Source: Charlie Bilello
Which countries have the most rate sensitive household sectors?
Source: BCA, The Longview
JUST IN: Futures now show a 0% chance of additional rate hikes with rate cuts beginning in May 2024
Prior to today's CPI report, there was a 30% chance of at least one more rate hike ahead. Rate cuts were expected to begin in June 2024. Now, markets are pricing-in at least 4 rate CUTS in 2024. Markets are betting that the Fed is done. Source: The Kobeissi Letter
