Summary
This document is a report that outlines expectations for the Asset-Based Credit (ABC) markets in 2025. It discusses the anticipated resilience of the US consumer and the economy, which are expected to support attractive risk-adjusted returns within the ABC complex. The report details various sectors, including consumer credit, credit cards, student loans, auto loans, commercial mortgage-backed securities (CMBS), data centers, and housing. It notes that while consumer credit is performing well, there are areas of concern, particularly in auto loans, due to rising delinquencies and policy risks. The report emphasizes the importance of monitoring economic indicators such as labor market conditions and inflation, which could impact consumer debt servicing capacity. Additionally, it highlights the potential effects of trade conflicts on consumer goods prices and overall credit health. The authors express a cautious optimism about the stability of the ABC markets, supported by strong consumer fundamentals and improved underwriting standards.
