It’s inflation day.

Stocks have rallied ahead of the key April CPI reading due at 8:30 a.m. today.

Buoyed by meme-stock caffeine, an uptick in trading volumes, and a hot-but-not-terrible result for April PPI data, the S&P 500 closed Tuesday’s session within spitting distance of a record.

The Nasdaq, meanwhile, closed at a new high.

Credit debt hovers near Great Recession levels

Uncle Sam isn’t the only one dealing with troubling levels of rising debt.

The wave is hitting everyday Americans, too. 

A growing share of consumers are falling behind on payments as they increasingly rely on credit cards and face the bite of inflation.

New York Fed data showed total household debt increased by $184 billion in the first quarter of the year. 

That 1.1% rise from the end of 2023 brings the total amount to $17.69 trillion.

Policymakers, meanwhile, continues to talk up the strength of the economy. Over recent months, the Fed has questioned whether financial conditions are tight enough. 

Evidently, “tight enough” depends on who you ask.  

“Higher inflation has hurt lower income households and people who use most of their credit line much more than higher income and lower credit usage households,” Jessica Rabe, the co-founder of DataTrek Research, told me.

Credit-card delinquencies have now climbed above pre-pandemic levels, according to the central bank report. 

These levels haven’t been seen since the Great Recession, though the trend has been snowballing for some time. 

From 2021 to the end of last year, credit balances climbed nearly 50%, according to Fed data, which marks the steepest climb on record for a three-year stretch. 

That spike in usage comes at a time when interest rates have soared. 

The average credit card annual percentage rate is hovering near a record at 20.66%, per Bankrate.

And while inflation has declined since its peak of 9.1% in June 2022, it’s not clear when it will fall back to the Fed’s 2% target. 

Those sticky, high prices in turn have put pressure on a huge number of US households. 

To be sure, much of this consumer pain has indeed been masked by broader economic strength, which has been supported by consumers who aren’t living paycheck to paycheck. 

This big-picture take seems to be what the Fed is most focused on.

“The offset from a macro perspective,” Rabe said, “[is that] wealthier households spend far more and they are still doing relatively well financially.”

*At a glance:

Elsewhere:

Rapid-fire:

Last thing:

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