Charting the Economic Horizon: Resiliency, Risk and Credit Trends

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You are listening to Leaders in Lending
from Upstart, a podcast dedicated to helping

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consumer lenders grow their programs and improve
their product offerings. Each week, here

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decision makers in the finance industry offer
insights into the future of the lending industry,

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best practices around digital transformation, and
more. Let's get into the show.

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This is Lend with Leaders in Lending
and happy to be joined by Joseph

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Mainz, who's the chief economist for
Experience here on the podcast today. Thanks

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for being with us, Joseph,
Well, thank you so much for having

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me. Do you know this actually
my first big time podcast and then part

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of well good Well, We're very
glad that you could be here, especially

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at CBA Live, knowing that you
presented earlier so you had a busy day,

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you know. If you could like
tell me and our listeners about about

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yourself, about your role at Experience, and about your background kind of what

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led you to being an economist.
Yeah, so, yeah, I'm the

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chief economists for Experience North America.
We also have great economic teams in the

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kank in Brazil. But really how
I landed here? So just quick background,

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So my undergrad is in philosophy and
I actually got interested in economics.

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I used to day trade all the
time in the life, very well studied.

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I made money, lost money,
and I was like, no,

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I need to really kind of fundamentally
understand what's happening here. And so that's

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what I got my master's in the
econ just fell in love with the discipline,

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and then I went on and did
banking policy for the US Senate.

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So I came out out here for
DC for a while, and then I

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went to Salt Lake, was an
economist out there for a large regional bank.

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Then I started my own economic consultancy
company, and then I started working

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with experience in that way, and
then now I'm in house with experience.

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I spend majority of my time,
about seventy percent of my time working with

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financial institutions all around the country.
So I think I did my end of

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year tally. I spoke over one
hundred organizations, like last year, from

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the kind of the largest financial institutions
all the way down community banks, credit

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unions, spin techs. So yes, it's awesome. Well that's interesting.

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I'm sure you travel quite a bit
then, probably to see all of those

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clients, and probably a good exchange
of ideas to kind of hearing what's happening

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and nationally, but then also you
know regionally and locally what's happening. Oh

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yeah, it's fascinating because each segment
of the market is really and they've reacted

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to the market, the environment we've
been in less severe use differently. Each

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has its own unique challenges and it's
very fascinating to give it to get the

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different perspective. The other thing that, you know, one of the biggest

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thing this is a relatively new role
at Experience and one of the things I've

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been focused on is there's so much
data within the company and all you have

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to consumer credit data, commercial credit
data, rep view of data, you

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know, housing market data, consumer
spinning data. But part of it,

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as you know as an economist,
it's like being a kid in a candy

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shop. It's how do you bring
all these pieces together kind of give a

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richer view of the economy that you
can did elsewhere. Sure well, and

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I think it's it's hard to believe
that we're really at the almost at the

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end of Q one, so as
we think about looking ahead to twenty twenty

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four, we're already part way through
it. But you know what are you,

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what are you thinking or what are
you seeing as kind of some of

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the key factors or indicators that are
that are shaping your outlook, and then

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also what is your outlook for the
rest of the year. Yeah, I

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think it's really interesting. You know, I spoke last year here at CBA

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Live and the sentiment was very different. It was right during the you know,

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the regional bank crisis, you know, a couple of bank failures.

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By that point, concern was definitely
in the air. If you look back

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in twenty twenty three, much more
the sentiment out on the street, among

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economists, among bankers were recessions on
the horizons. Sure, right, if

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you look at where we are now, I think everybody I just spoke from

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a room pull of bankers, everybody
is has been very surprised at the resiliency.

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And so what you've seen is economic
growth is outperformed expectations really again and

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again over the last year. But
you know, when I look forward,

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I see that the economic growth continuing. I think if you look at the

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Fund Reserve just put out their latest
forecast, increased the path of growth for

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twenty twenty four. Our internal forecast
again show a solid, solid year of

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growth. So our view is not
is not recessionary this year and we have

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a solid growth picture. I think
there's always risks on the horizon to think

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about what are some of the I
guess biggest indicators to you then, I

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mean I think there you mentioned earlier
just the volume of data out there,

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and I know I you know,
I worked in investments for a long time

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and did a lot of due diligence
and some of the high frequency traders who

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use a significant amount of data,
so there's there's almost an endless amount of

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data points you could look at.
But to you, like, what are

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some of your going to top indicators, either leading or lagging indicators that you're

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looking at in your work to come
to that that kind of assessment of recession

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likelihood. Yeah, for sure.
So I mean they got most interested at

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the moment. I think it's been
the biggest driver of our growth and probably

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the most surprising thing is the resiliency
of the labor market. So if you

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look back over the last three months, we're adding on average two hundred and

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sixty thousand jobs a month. Prior
to the pandemic, where we also had

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a very low unemployment rate three and
a half three point seven percent, We're

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adding about one hundred and eighty thousand, so we're we're adding a lot of

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jobs every month. Unemployment overall remains
very, very low, and so when

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you think about the economy, consumers, consumer spending drives two thirds of growth.

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That's where kind of that drive has
been. And I see continued growth

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this year, and so to that
as well, consumer spending has been strong,

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has been stronger than I think many
economists would have expected at this point.

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Do you do you think so?
Do you think maybe we're seeing too

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much growth? Like do you think
there should be a little bit of a

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pullback or or do you are you
more kind of reacting to what you're seeing

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versus necessarily have an opinion on where
it should go. No, I don't

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think. I don't think we need
to see a significant slow down. You

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know, there was a question earlier
last year, you know, will the

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unemployment rate need to rise materially and
so the economy slow, some inflation slows,

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And I think the answer is no. You've seen inflation make a pretty

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significant progress over the last year.
May not be exactly where the Fed wants

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to see. You. Affliction has
picked up a little bit in recent months,

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but overall it's been moving in the
right direction. And I don't think

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you need to see a big slowdown
or changing growth. I think I think

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we're growing at a good rate.
And you know, you mentioned the you

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know, the the fence forecast for
twenty twenty four and what are your expectations,

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and you know, maybe kind of
share with our listeners, like what

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the Fed is saying and then and
then what you and your role at experience

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are thinking about interest rate changes.
Really just over the year. I think

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farther than that out gets a little
bit harder to go. Yeah, yeah,

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you're exactly right. After a year, you know, it's that's that's

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pretty difficult. But you know,
I would say, one, there's been

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a shift in the market. In
December, the Fed had put out the

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previous forecast where they expected three interest
rit cuts this year, and immediately,

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you know, market participants started pricing
in six and maybe seven rate cuts this

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year, which was which was I
think way too many. Mark got a

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head of itself there. And what
you've seen over the In the latest meeting

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when the Federal Reserve just just met
and released their latest projective projections, again

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they reiterated three rate cuts this year, and that to me again feels right.

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I think it's pretty it's gonna be
pretty close whether maybe they do three,

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maybe do two. I still feel
three is the right path, and

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I still think it's probably roughly a
coin flip at this time. I think

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they cut in June, I think
they cut in September, and I think

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they cut December, and that allows
the FED to basically cut weighty meaning cut

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weighty meaning cut. You know,
they can take a more cautious approach that

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way then at those meeting, and
it also allows them to They released their

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forecast so they can provide more context
to their overall view. You know,

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in terms of financial institutions, you
know, that first rate cut is going

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to send I think a signal to
the market that the FED is now going

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to be moving into this more of
an easing cycle at least not keep rits

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so restrictive. And that has all
kinds of implications. If you look at

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the challenges financial institutions have had with
deposit costs right especially after the regional bank

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crisis, there is a big challenge
to retain get deposits. You never want

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to be seen, especially on you
know the market is having any challenges there

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and also deposit costs. Obviously it's
rates coming out. It helps with consumer

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demand for lending things like that.
Sure, Yeah, and we definitely spend

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a lot of time talking about when
the bank failures happened, like the worry

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about the contagent is it just going
to get worse? And sometimes I think

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it self perpetuates where it becomes a
consumers believe in. Enough people believe it,

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it will it will kind of manifest
itself. So it's it's I think

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it was relieving to all of us
to see that not not cometril and to

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those be a little bit more kind
of localized to a few institutions. You

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know, certainly with with with rates
kind of being and staying high for consumer

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lending. You know, as you
think about just credit growth in the in

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the market right now that I think
demand for loans is a little bit less

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and we're certainly seeing that in the
personal loan market because rates are high and

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and so people are not borrowing.
What are your thoughts about kind of just

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overall credit growth, whether consumer commercial
availability of credit and where you might see

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it start seeing some kind of stronger
growth areas out there, so I think

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it's been for me. It's the
most interesting dynamic that's played up over the

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last year is that you had really
a very strong economy, You had really

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good labor market, you had good
spending, and yet credit growth has slowed

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quite significantly over the last year.
And so what I'm watching going forward.

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It's slowed for a couple of reasons, and it's what I'm watching is that

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Number one is recession concerns. Right
especially after the regional bank crisis, everybody's

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concerned about potential for a recession last
year, even though the economy was good,

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people are just waiting for the next
shoe to drop. And when you

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have the institutions are much more cautious
than what they do on their investment lending.

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But the other thing you had was
you have delinquencies beginning to rise,

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and as delinquencies rise, institutions tighten
their lending standards, they base your lending

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standards, and that reduces the supply
of credit. So that's going to slow

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growth. And then you have the
interest rates, which remained high, and

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that slows the demand for credit.
So you have recession concerns. You had

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reduced supply for credit, and reduce
demand for credit. And so what I'm

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looking for this year to anticipate kind
of this turnaround is really what develops in

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those those three segments. And if
you look at recession concerns, you know,

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just for instance, you know,
eight months ago, when I ask

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a roomful of people, do you
think there's going to be a recession?

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Every hand realizes Today I just spoke
to seventy five many people I asked,

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do you think there's gonna be recession? Not a single hand rais Maybe that

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was a shad group, but that's
the sentiment that I've been getting. That's

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that's a good key. And I
think things are moving in the right direction.

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And once you know, as you
mentioned before, once we get more

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of a staging from the Fed that
this higher rate regime is probably coming to

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an end, it gives a little
more certainty to the market to kind of

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move forward. And what do you
think? I mean, it sounds like

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as you think about like the kind
of order of operations, like what has

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to happen first, Like you know, certainly as rates rose, then delinquency

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standards titaned. As defaults rose,
then delinquency standard titans. Do you expect

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to see it kind of on the
reverse of that coming out of it,

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where interest rates have to be cut
and then some timeline before you start to

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see maybe a little bit of easing
of lending standards. Yeah. Yeah,

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So I think the two aren't necessarily. I think the lendings standard piece is

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going to be more connected to what
happens with delinquencies. And generally, when

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I speak with financial institutions, you
know they're anticipating a delinquencies to maybe peak

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at the back end of this year, you know general maybe middle of next

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year, and so you know,
thinking about that piece, you know,

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that kind of gets you, gets
you going on the lending standard. I've

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looked at historical cycles. So last
year I wrote a paper it's called Timelines

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of Recession and Recovery. Well,
I started looking at all these variables that

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are important for financial institutions, all
kinds of living market variables. And Okay,

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when what happens in the two years
leading up to recessionary time period or

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period stress, what happens during recession, we're happens some two years after.

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And so using that context, when
I think about it, when I look

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at the lending standard piece, the
lending ctenter titaning piece. If I if

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I anticipate in that the delinquencies are
probably going to peak the next year or

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so. If you look historically kind
of when the pace of lending standard peaks

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too, when year your credit growth
or revolving consumer non involving consumer credit kind

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of hits its bottom, it's about
five to six quarters. So if you

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think that kind of peek at the
early part of twenty twenty, you know,

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first quarter of twenty twenty three,
I mean first half of twenty point

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three, it's actually Q two,
then you're looking at maybe back in twenty

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twenty four maybe for a credit bottom. And when I speak to our partners,

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they seem to have that share,
that same sentiment, and so I

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like to use these kind of tidelines
as a baseline view for then you start

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bringing up the variable to say wall
maybe that's maybe that's too early, When

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it's too late. The institutions are
definitely thinking about that. Are you seeing

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or are you thinking about? Is
that is that spread across kind of the

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credit market, the type of consumer. And I think there's some evidence out

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there that like maybe prime or people
who appear to be prime borrowers, or

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more stress than historical and maybe performing
worse than they were expected to perform in

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credit. Is that something that you're
seeing in the data that you're looking at

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and the institutions you're speaking to as
well. Yeah, I think that's a

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really interesting question. So if you
think about when institutions first, and the

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narrative, narrative has been that inflation, these cost of living challenges has really

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hit that kind of lower income consumer
the most. And what you saw is

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when institutions rushed to tighten lending standards
to kind of mitigate some of that risk.

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A lot of that tightening was focused
in those subprime near prime consumer segments,

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not so much on the prime and
you've definitely seen the more stress of

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that segment of the market. But
I've been speaking with some especially I hear

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this more in the fintech community about
stress maybe starting to creep up a little

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higher in the prime near prime prime
segments. And you know, if I

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was looking at the role rates,
so the percentage of accounts for credit cards

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that are rolling into higher status of
dean see you look at the subprime segment.

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Obviously it's a very it's been more
of a steep angle, but recently

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the past couple of months, I've
kind of seen it plateau out a little

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bit same from near prime nearpome not
quite a steep, not quite a accelerated

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role right there, but it's still
a little step. Also started flatten out

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when you didn't see those I looked
at the prime consumers over the past three

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months, and that real rate hasn't
ticked over, it's just kind of gone

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up a little bit, And so
I think there's some interesting dynamics there.

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One thing I'm looking at closely because
of that is I'm looking at the role

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of ripped rent costs. So you
know, over the since being pandemic,

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rent costs have gone out a by
like thirty percent, and a lot of

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times negative rent. You know,
you have a if you miss your payment

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or you have an overdy balance that's
not always reported to the bureau, so

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it doesn't really reflect on your credit
score, but that doesn't mean there's not

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stress there. And when you look
at the segments, you know, overall

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rented income has gone you know,
from roughly thirty percent, like thirty eight

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percent of medium rent to income,
which is pretty pretty high. But if

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you look at the segments, if
you look at the the the ringers that

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are renting at apartments that are like
fifteen hundred, two thousand dollars, they're

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rental stress or their rate of increase
for their negative paintent behavior kind of peaked,

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you know, last year like twenty
twenty two, but it's kind of

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moderated. The higher income bucks like
twenty five hundred to like three thousand dollars,

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we actually saw a much steeper increase
in that it's not quite as high

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overall, but steeper increase and not
much We don't really seen much improvement there.

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So to me, that's a little
bit of time that kind of that

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kind of hits on the point that
there may be a little more stress in

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that prime segment because I'm taking making
an assumption that the high people who are

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renting at higher chef levels or higher
income probably higher score. Are you Are

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you seeing any difference in geography like
I'm you know, I know that unemployment

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obviously very low and continues to be
low, but there have been very large

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layoffs, particularly across the tech centertor
of relatively high paid employees. Are you

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seeing anything or do you look at
that geographically or by industry or are you

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seeing any like pockets of stress that
they explain that or is it kind of

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too early to tell. Well,
so I think the two parts, going

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back to the rental piece, the
Federal Reserve has done a study on this

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that one, renters have seen a
higher increase in credit card debt, and

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they've also they also have higher delinquencies
that homeowners. Right, that makes sense.

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Homeowners benefited very greatly from the home
valuation increases, while renters, I

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just had to pay more. And
that stress is even more concentrated in like

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those second home vacation home communities where
you have people who've been living there the

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whole life. You know, there's
not a lot of housing stock, not

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a lot of renting units, and
you have all this work from home.

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People move in to the area,
pushes up rental prices. Home prices increase,

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and now if you're a renter there, I've been there for a long

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time. Now you got to eat
that cost or you got to try to

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move. So that's one piece.
The other piece, you know, yes,

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I mean definitely there's variation unemployment rates
across the country, but broadly,

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you know, if you look at
the tech layoffs in particular, yes,

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you know they significant within the market, but broadly as a whole, on

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the component of the overall labor market, it's still pretty small, and layoffs

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overall still you know, if you
look at the the number of people who

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are filing unemployment each week, it's
still below pre fandemic levels. That's interesting.

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It definitely seems like a pretty unique
economic environment and with a variety of

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things that as you said, last
year, everyone was confident we were heading

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to recession, and this year much
less confident. But certainly we can always

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be surprised. And I think you
had mentioned that some of the key factors

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really driving that growth, the economic
growth for the for the US is consumer

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spending and consumers really driving that.
Do you think that that is going to

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continue for the foreseeable future, that
we can expect to see that really being

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driven by the consumer spending. I
mean, I think so, Like I

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don't think, you know, consumers
have been spending at a very strong clip.

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You know, I don't think we're
going to see the kind of strength

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of growth like we saw last year. I think consumers they'll still have the

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ability to spend. So if you
look at wage growth by income quartile,

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So the Federalserve Bank by land Up
puts out a good series on this.

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But basically, you're looking at wage
growth from the lowest income and quartile to

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the highest roughly around five percent now, and whatever measure you take of inflation,

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it's wages are cling faster. So
wage growth is exceeding inflation. If

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you look at real disposable income,
so incomes after tax sudjusted for inflation on

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a year on your basis, that
continues to improve and net worth net growth

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networth for households is roughly thirty percent
of up pre pandemic levels. You think

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about all the home value gains,
you think about stock market gains, those

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those components together tell you that the
consumer they have the ability to spend.

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I think the other piece to that
that is the next question, and it's

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like, well, you know,
you know, have they spent through their

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savings, the finance the spending if
they need to. And I think if

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you look at overall on the aggregate
debt burdens when adjusted for the incoming increases

294
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we've seen over the last couple of
years, it's basically pre pandemic levels.

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And historically stress a well, now
there's definitely different pockets of stress and pick

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up, but I don't aggregate.
Yeah, yeah, it is interesting that

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you see. And I think the
impact of stimulus during the COVID years was

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probably greater than most of us expected
it to be. And then there was

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a lot of anticipation of the student
loan moratory ending and consumers having to pay

300
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those back, and that really hasn't
turned out to be a big impact either.

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And we are still seeing condefered by
a lot of durables, so the

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durable purchases still remain really high,
which I think is interesting. You know,

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you'd mentioned those kind of high debt
loads, like our people are people

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maxing out? Uh, it actually
made me think of something, you know,

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interesting that you mentioned, Like with
rent increasing, that's kind of a

306
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it's almost like a you know,
off balance sheet item. It's not on

307
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your credit report, so similar to
maybe the buy out pay later and some

308
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of the new fintech offerings that that
are not reported in the same way,

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maybe don't show up in a traditional
event to income if the credit report is

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the source of that. Like any
thoughts on that that maybe there's some like

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a hidden or obscured risks out there
that we can't see right now. Yeah,

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I think I think underappreciated risk.
I think so. I think I

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think the rental the rental piece definitely
bears watching, you know, if you

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look at the buy out pay later
space, you know, as an economist,

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and I think we're going to start
getting more more visibility into this.

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But whenever you can't see a potential
debt load, that's you know, it's

317
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opaque at the moment, you don't
have a lot of visibility into it.

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That's always something that you have to
worry about the size of it though,

319
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you know that and how how much
that may impact consumers. I think that's

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kind of speculation at this point,
but you you always have to keep that

321
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in mind when you're thinking about how
much debt does consumers have, and you

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know, looking at the overall that
overall aggregate debtloads still manageable. If we

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look at you know, kind of
our internal data looking at some of the

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debt income for you know, subprime, your prime, that's definitely risen faster

325
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when I think to some of these
challenges, you know, the increase in

326
00:22:30.279 --> 00:22:36.039
debt, it's if the economy keeps
doing well and you know, we don't

327
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have you know, wholesale layoffs and
things like that. It's not it's not

328
00:22:38.759 --> 00:22:42.079
that big of a problem, especially
in the shorter term. Obviously, higher

329
00:22:42.160 --> 00:22:45.279
debt loads and an environment where you
lose your job, you can't find in

330
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the job when recession, that's more
problematic. Sure, so what do you

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you know as you think about like
rent is increasing, but there's also some

332
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obviously housing prices are still very high, and then interest rates for mortgages fluctuate

333
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a little bit but remain high from
what we've seen, not high historically,

334
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but high from what we've seen over
the past several years. Do you think

335
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that there is a is interest rates
come down? Do you think that there's

336
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a place where where maybe home buying
becomes more advantageous again, particularly for people

337
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who don't own a home. And
then there's the you know what about the

338
00:23:17.640 --> 00:23:19.400
people that are kind of locked into
a very low fixed rate and feel like

339
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they can't move over, can't can't
upgrade or move up to a bigger home.

340
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I just kind of general thoughts on
the housing market today. Yeah,

341
00:23:26.400 --> 00:23:30.400
so I think on the housing market
one generally, you know, I think

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we'll see what's the FED makes their
first movie start seeing interest rates come down

343
00:23:36.319 --> 00:23:38.000
a little bit. I think we
will see a little bit of a pickup,

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not only just in home building,
because home builders have really pulled back

345
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a lot of affordability challenges, especially
for first time buyers and the new home

346
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market. But I think that I
think we will see kind of a pickup

347
00:23:51.079 --> 00:23:53.359
and growth there, but not a
lot because so many of the mortgages,

348
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to your point, are locked in, like eighty percent of mortgages are locked

349
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in under five percent or something like
that. So there's some there's some room

350
00:24:00.839 --> 00:24:04.480
for improven in there, not a
lot, you know. Honestly, I

351
00:24:04.559 --> 00:24:07.319
don't feel that bad for people who
locked in an interest rates two and a

352
00:24:07.319 --> 00:24:12.720
half percent. You know, values
rise and so yeah, yeah, it's

353
00:24:12.799 --> 00:24:15.160
it's really it's not a bad problem
to have, I guess. So it's

354
00:24:15.920 --> 00:24:18.599
unless you need to move for work, if you know, something like that's

355
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true, unless you have to.
But there are some there have been a

356
00:24:22.039 --> 00:24:23.720
lot of articles like, oh no, people can't move because they have these

357
00:24:23.799 --> 00:24:29.240
great interest rates that locked in for
thirty years in this home that was valued

358
00:24:29.240 --> 00:24:32.039
at twenty five percent. Then today
it's like, well that's a that's a

359
00:24:32.039 --> 00:24:37.440
different kind of if you're going to
have a housing problem. So I think

360
00:24:37.480 --> 00:24:40.880
that you know, we've talked about
just that kind of forecast of the economy,

361
00:24:41.200 --> 00:24:42.519
your ideas for what you you know, your thoughts on what you think

362
00:24:42.519 --> 00:24:48.599
that the fen's going to do and
a credit growth, consumer behaviors. What

363
00:24:48.720 --> 00:24:52.599
are like some maybe key risks on
the horizon, things that you know,

364
00:24:52.640 --> 00:24:57.359
we we've gone from expecting recessions to
know probably not at least imminently respecting expecting

365
00:24:57.400 --> 00:25:03.359
one, but we it's out there
that could I think disrupt that economic stability

366
00:25:03.799 --> 00:25:07.880
or growth in the coming year.
Things that could surprise us, not like

367
00:25:07.960 --> 00:25:11.759
a black swat event type issue,
but it's something more more typical or that

368
00:25:11.880 --> 00:25:15.279
could surprise us and derail where you
think we're headed today. Yeah, So

369
00:25:15.759 --> 00:25:22.279
one thing I always like to think
about is why did the economists and bankers

370
00:25:22.400 --> 00:25:26.440
and you know, much of the
industry get the recession called wrong last year?

371
00:25:26.119 --> 00:25:30.400
And for me, it's really two
reasons. I think that we,

372
00:25:32.200 --> 00:25:34.400
by the way experience, we did
not forecast the recession last year, so

373
00:25:34.480 --> 00:25:41.079
we were on the good side of
that call. But we overestimated the impact

374
00:25:41.359 --> 00:25:47.640
of great hikes on the labor market. So BED raises rates or five hundred

375
00:25:47.640 --> 00:25:51.559
basis points unemployments basically where we were
when we started, okay, and we

376
00:25:51.799 --> 00:25:57.680
underestimated. The second thing is underestimated
the resilience of the consumer to continue spending.

377
00:25:57.720 --> 00:26:00.240
And part of that is because labor
remain so strong, but part of

378
00:26:00.279 --> 00:26:06.119
it is because consumers have just had
a desire to keep spending and the dynamics

379
00:26:06.160 --> 00:26:08.039
have shifted to where they can continue
spending. But there's a lot of you

380
00:26:08.200 --> 00:26:11.759
that all of the excess savings has
run out, consumers are going to fall

381
00:26:11.799 --> 00:26:15.759
to cliff that didn't happen. But
when I think about that, I think

382
00:26:15.799 --> 00:26:19.720
about Okay, So in the back
of my mind is did we get the

383
00:26:19.880 --> 00:26:26.240
impact portion wrong or did is the
timing wrong? So maybe these stresses that

384
00:26:26.279 --> 00:26:32.039
we thought when materialized last year are
still in our on the horizon. So

385
00:26:32.279 --> 00:26:37.920
if you look back historically at the
previous periods of right height cycles lived at

386
00:26:37.920 --> 00:26:41.640
the eighties and the nineties on the
pre GFC period recovered, you look at

387
00:26:41.680 --> 00:26:47.079
when the FED started raising rates,
so when they stopped raising rates, and

388
00:26:47.519 --> 00:26:51.319
basically every instance they're un a plane
where it was lower. Okay, we're

389
00:26:51.359 --> 00:26:53.000
not that far from the Feed stopped
raising rates, you know, third quarter

390
00:26:53.000 --> 00:26:59.319
of last year. So but we're
in we've been cheering that. I think

391
00:26:59.400 --> 00:27:02.240
rightfully, so we should be.
We should be pleased where the economnists,

392
00:27:02.240 --> 00:27:04.559
where the labor market is. But
then you're thinking, like, well,

393
00:27:04.680 --> 00:27:08.880
is this really so special, because
then if you look three years after,

394
00:27:10.079 --> 00:27:11.799
or even if you go two years
after when the FED stop raising rates,

395
00:27:12.920 --> 00:27:17.440
in four out of those five cycles
we ended up a recession unemployment rate rise.

396
00:27:17.880 --> 00:27:21.240
So one of the question is is
this dynamics so special? Now?

397
00:27:21.559 --> 00:27:25.440
Have we avoided recession at the moment, I think the answer is yes,

398
00:27:25.480 --> 00:27:27.720
I don't see a recession this year, but always in the back of your

399
00:27:27.759 --> 00:27:30.720
mind you have to to maybe we
got the time of the impact wrong.

400
00:27:32.640 --> 00:27:34.920
Consumers too, you know, consumers
they don't you know, they don't have

401
00:27:36.039 --> 00:27:40.160
as much cash on here and as
they did last year, and so but

402
00:27:40.319 --> 00:27:42.440
I still think that the impetition.
I think consumers can continue spending this year.

403
00:27:42.440 --> 00:27:45.240
I don't think it's going to be
as much. But I think you

404
00:27:45.279 --> 00:27:48.240
always have to keep history. I
think history can keep you humble in periods

405
00:27:48.319 --> 00:27:51.200
like this, and you always have
to keep an eye on that. No,

406
00:27:51.359 --> 00:27:52.599
I think that's a great point,
and I think particularly there are a

407
00:27:52.680 --> 00:27:56.079
lot of you know, you mentioned
the Great Financial crisis. There are a

408
00:27:56.160 --> 00:27:59.559
lot of people working and who are
adults who are buying homes and starting families

409
00:27:59.599 --> 00:28:03.319
and who are not working during a
great financial crisis, so they kind have

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only seen a positive economic environment and
this is maybe the first time that they've

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really seen some stress out there.
So well, anyways, Joseph, thanks

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for being on the podcast. Great
conversation. Love hearing about your thoughts on

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what we can look forward to in
twenty twenty four. Thank you so much.

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I appreciate the option up Start partners
with banks and credit unions to grow

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00:28:22.680 --> 00:28:29.400
households and expand consumer lending through its
leading AI lending platform. Upstart powered banks

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00:28:29.440 --> 00:28:33.480
and credit unions leverage AI to offer
higher approval rates and experience lower loss rates

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00:28:33.519 --> 00:28:40.519
while simultaneously delivering the exceptional digital first
lending experience that consumers demand. Whether you're

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looking to grow and enhance your existing
personal and auto lending programs or you're just

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getting started, Upstart can help.
Upstart offers an end to end solution that

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00:28:49.079 --> 00:28:53.440
can help you find more credit worthy
borrowers within your risk profile. With all

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digital underwriting, verification, loan closing, and servicing. It's all possible with

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00:29:00.079 --> 00:29:03.279
upstart in your corner. Learn more
about finding new borrowers, enhancing your credit

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00:29:03.359 --> 00:29:08.440
decisioning process, and growing your business
by visiting upstart dot com slash lenders.

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00:29:08.880 --> 00:29:11.559
That's Upstart dot com slash lenders.