Credit Growth Continues to Slow

As you know, we watch credit markets closely. In an economy completely dependent upon credit growth to keep from falling into a recession, a credit slowdown is not good news. Here is the latest data:

At this rate, we will see negative credit growth year-over-year by late 2017. We have never had negative credit growth in the U.S. without a recession. What’s even stranger is that the Fed is hiking rates as the data weakens; in the past, rate hikes have always occurred as credit and inflation were accelerating…historically the only reason behind raising rates in the first place. I can’t help thinking we are heading into deep trouble this fall. Is the Fed trying to slow down the equity bubble? Could they cause a crash instead?