Debating the Consumer Balance Sheet: Healthy Now, Potential Headwinds in 2024

The consumer balance sheet is currently healthy, with consumer credit cards at 2019 levels and growing faster than liabilities. However, there is a concern that it may turn into a headwind in 2024. The impact of Fed policy rates has disproportionately affected lower income individuals and smaller businesses, who tend to have more floating rate debt. Meanwhile, larger borrowers, with the ability to borrow at lower rates, have not been affected.