On a day when an early attempt by the BOJ to kickstart the global carry trade by capitulating on Japan's recent mistimed foray into rate hikes, has crashed and burned with stocks tumbling, amid renewed concerns that the US economy is slowing (at least until next week's "surprising" CPI beat), moments ago the Fed poured gasoline on the rising flames when it reported June consumer credit data that was atrocious, and confirmed our worst fears: the consumer has hit a brick wall.
According to the Federal Reserve's monthly consumer credit report, in June total consumer credit rose just $8.9 billion, below the median estimate of $10 billion, and a material drop from the upward revised May print of $13.9 billion.
But while the total number was not shocking, if confirming the recent declining trend which always signals economic contraction (since without credit, US consumers simply can't spend), it was the composition that was a big surprise.
On one hand, non-revolving credit - which consists of student and auto loans - rose by $10.6 billion, which was the biggest monthly increase since last June.
