Part 5/8:
In analyzing the financial climate, Zion pointed out that while interest rates have risen, there exists no overarching bubble-like phenomenon in the market, as seen in previous economic crises. The high cost of capital—driven by demographic factors due to Baby Boomers retiring and liquidating their high-velocity investments—has resulted in more prudent financial behaviors among consumers and businesses.
Even though delinquency rates on loans have risen, they remain considerably lower than historical averages. This strong credit condition suggests that households are able to manage their debts, further insulating the economy from downturns.