Most Americans have already drained the excess savings they made during the Covid-19 pandemic, Marko Kolanovic, a senior stock strategist at JPMorgan bank, said in a note this week.<\/p>\n\n\n\n
According to Kolanovic, inflation-adjusted liquid assets such as deposits and money market funds of nearly all US consumers will be below 2019 levels by mid-2024.<\/p>\n\n\n\n
\u201cIt is likely that only the top 1% of consumers by income will be better off than before the pandemic,\u201d he warned, noting the recent surge of credit card and auto loan delinquencies and a growing number of bankruptcy protection filings.<\/p>\n\n\n\n
According to JPMorgan\u2019s earlier calculations, Americans\u2019 excess savings reached a record high in August 2021 at $2.1 trillion. However, in October this year, they were down to around $148 billion. The bank\u2019s strategists explained at the time that the trend stems from \u201ctighter credit conditions and rising rates, wind-down of Covid-era stimulus and relief programs,\u201d as well as multiple years of above average inflation.<\/p>\n\n\n\n
Kolanovic noted that the housing market is so far stable despite high borrowing costs, \u201cas consumers locked in low interest rates.\u201d<\/p>\n\n\n\n
\u201cHowever, existing home sales have dropped near record lows, and roughly $6.5 trillion of commercial real estate debt remains an overhang,\u201d he warned.<\/p>\n\n\n\n