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Investors are getting cautious about consumer debt


Investors are increasingly nervous about consumer debt-backed bonds, fearing that inflation and slowing growth will increase the number of low-income borrowers behind on car payments or credit card bills.

Buyers of bonds backed by subprime auto loans or credit cards are demanding the highest premiums over benchmark interest rates since mid-2020. Meanwhile, investors punished the shares of some fintech companies that helped fuel a recent surge in consumer borrowing, like Affirm Holdings and Upstart Holdings.


Wj

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