Amid an ongoing cost-of-living crisis, the additional financial pressures on household budgets wrought by the war in Iran alarms Mark Zandi.
The Moody’s chief economist noted Tuesday on LinkedIn that as of February, before the economic impacts of the war took hold, more than 10% of debt belonging to borrowers with credit scores below 660 at origination was delinquent. He noted that it represents the highest delinquency rate in more than a decade.
“What happens now that they have to pay $4 a gallon for regular unleaded, up a buck from a month ago, and face much higher interest rates and little prospect for refinancing their debts?” he wrote. “I shudder to think what will happen if unemployment continues to rise.”
The unemployment rate was 4....