“When we look at checking and savings accounts across Bank of America, we see our client base, which is 67 million households across the U.S. in strong positions. Balances and checking accounts are more than double what they were pre pandemic,” said Sieg.
Peak debt utilization will depend in some measure on mood. It has been shown that the Misery Index parallels the Conservative Policy Mood, a measure of a psychology more designed to avoid debt-spending and hoard resources in preparation for a shortage.
Another factor which likely will affect conservative policy mood levels would be disgust/disease-aversion. It is possible the stress of the pandemic placed a lot of people in a more conservative, instinctual, resource-hoarding mood, which will allow peak debt-utilization to occur while substantial numbers of people are still sitting on substantial amounts of resources that they will go without to maintain. People post pandemic are fundamentally different than they would be at the end of an extended boom.
The important factor in debt utilization is its presence or absence, not necessarily whether the population is in dire straits or not. A wealthy population which instinctually stops spending out of caution will have a similar effect on the markets as a more spendthrift populace which has reached the peak of its debt-utilization and has no more ability to mobilize borrowed funds for spending. It is the spending or the lack of spending which is significant, and that will have a psychological element to it that goes beyond the numbers.
