Releveraging not yet a threat to the expansion

With last week’s release of the US Financial Accounts, we can update where the US economy is in its releveraging process. The process is playing out slowly, which is acting as a headwind on bank loan and revenue growth. From a macro perspective, however, the more important issue is that tepid credit demand is delaying the development of destabilizing financial imbalance that can trigger recession. FH-171215