Since the Fed started raising rates, banks are much less willing to lend to consumers, and every day there are more and more consumers who have difficulties getting a credit card, auto loan, or mortgage, see the first chart below.
That is how monetary policy works. By raising interest rates, fewer households can borrow, which is why credit growth is slowing rapidly, see the second chart.
With consumers facing higher interest rates and tighter lending standards, the downside risk to nonfarm payrolls over the coming six months is significant, see again the first chart below.
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