🔴What is happening with US consumers? US household debt declined -$13 billion in Q2 2026 to $18.77 trillion, the first quarterly decline since Q2 2020. The decline was driven by mortgage debt, which fell -$74 billion to $13.12 trillion. Student loan balances also declined -$7 billion to $1.65 trillion, the lowest since Q2 2025. Historically, aggregate household debt has rarely declined outside periods of major financial or economic stress, making this contraction unusual given that risk assets were surging in Q2. However, the headline decline masks a more concerning trend: non-housing debt rose +$48 billion in Q2. That was led by a +$28 billion jump in auto loans to an all-time high of $1.71 trillion, and a +$21 billion rise in credit card debt to $1.26 trillion, the 2nd-highest on record. In other words, the consumer may look less leveraged on paper, but the underlying credit data tell a very different story.