FED: US TSY TO SELL $39.000 BLN 9Y-11M NOTES SEP 10, SETTLE SEP 15

• US TSY TO SELL $100.000 BLN 4W BILL AUG 07, SETTLE AUG 12

Consumer delinquency rates saw another push higher in Q2, driven by a further large jump in those for student loans as a resumption of data collection continues. A silver lining is that most other areas saw steadier transition rates into delinquency although that's already at above pre-pandemic rates. 

• The NY Fed Household Debt and Credit Report saw the transition rate into serious delinquency rise 0.5pts to 2.9% for its highest since early 2014.
• However, this is driven by another lurch higher in student loan delinquency rates in Q2, the second quarter where previously missed federal student loan payments can now be reported again.
• The aggregate delinquency rate in Q2 for student loans of 10.2% is back close to pre-pandemic averages although the transition rates are materially higher (13.0% into 30+ and 12.9% into 90+). The 90+ day transition rate had previously peaked at 10.5% in data going back to 2003.
• Sticking to transition rates into serious delinquency, beyond the 4.8pt quarterly increase in student loans (to 12.9%) the next largest was +0.3pts to 1.15% for HE revolving loans (vs 0.8% in 2019). Mortgages increased 0.1pt to 1.3% (vs 1.1%), auto loans were steady at 2.9% (vs 2.35%) and credit cards dipped -0.1pt to 6.9% (vs 5.2%).
• As such, whilst student loans drove the increase in delinquency rates in 1H25, most other major lending avenues are all above pre-pandemic levels.
• From the MNI Policy Team’s write-up: "The credit scores of some of these [student loan] borrowers are falling, so that'll mean more difficult access to credit in the future," New York Fed researchers told reporters on a call. "The fact that they're falling behind their student loans suggests that their cash flows are not adequate for all their obligations," a trend worth watching over the next quarters. 

• US TSY 52W BILL AUCTION: HIGH 3.760%(ALLOT 56.68%)
• US TSY 52W BILL AUCTION: DEALERS TAKE 38.62% OF COMPETITIVES
• US TSY 52W BILL AUCTION: DIRECTS TAKE 4.81% OF COMPETITIVES
• US TSY 52W BILL AUCTION: INDIRECTS TAKE 56.57% OF COMPETITIVES
• US TSY 52W AUCTION: BID/CVR 2.85