I am also skeptical about the need for a rate cut.

I don’t think a rate cut is coming any time soon and if it wasn’t an election year I have a hunch we would likely see another hike or two.

Anecdotally from my day job, the funding costs for the captive I work for have crept back up near the highs we saw last November. The market seems to agree we won’t see a rate cut for a while yet. The month to month changes in our costs roughly track the 3yr US treasury for our US lending and I would say that’s probably about the same for captives of the major auto manufacturers. The 0%/60mo and 0%/72mo offerings we see in the market still for some of the manufacturers are probably costing them in the neighborhood of 15%-20% of the financed amount for the vehicles. Probably more because their write offs are so much higher than what I’m used to.

The consumer side of our business continues to weaken and likely will not turn around until housing starts increase.

The business side peaked several months ago as the long order backlog has finally been eroded and new orders coming in are down significantly from same time last year. Banks are tightening up on some customers for operating lines and write-offs are starting to tick up off historical lows.

My employer would definitely like to see rate cuts to start to drive some demand but my personal finances would definitely like to see inflation contained.

Jeff

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