In this episode of The Economic Effect, John Silvia analyzes the Federal Reserve Bank of New York's latest Household Debt and Credit Report for Q1 2025—prior to the announcement of Liberation Day tariffs. The report reveals a rise in serious delinquencies across auto loans, mortgages, home equity, and credit cards, particularly among younger and middle-aged borrowers. This trend aligns with declining consumer sentiment, falling savings rates, and slower real consumer spending. John notes that even before the tariffs, consumers were under mounting financial pressure. The S&P 500 also declined by March, further signaling weakened financial conditions.  Looking ahead, John warns that new tariffs will likely reduce real disposable income, raise interest rates, and worsen credit quality for banks. He emphasizes the importance of examining not just the direct effects of economic policies, but also their broader, long-term economic consequences. Join my newsletter for weekly updates and insights into Economics.   https://www.johnesilvia.com/subscribe/ Twitter @JohnESilviaPhD https://x.com/JohnESilviaPhD LinkedIn https://www.linkedin.com/in/john-e-silvia/