November Market Pulse Q&A: Experts Answer Your Questions on the Latest Trends to Know as the Year Ends

Highlights: 

• The primary economic risk identified for the coming year is a slowdown in consumer spending, which could be triggered by a loss in stock market valuation for high-income consumers or a weakening labor market (potentially exacerbated by AI) for lower-income consumers.

• Market analysts express concern over a possible "AI bubble," citing historically high measures of stock market pricing and the outsized influence of single companies like NVIDIA on the S&P 500's overall value, suggesting a need to monitor whether these valuations are sustainable.

Both before and during each Market Pulse webinar, our audience submits their burning questions to our expert panelists. 

For our November Market Pulse webinar, our panel included Dr. Robert Wescott, President of Wescott Strategic Advisors, Maria Urtubey, Senior Advisor at Equifax, and Darryl Tyndorf, Director of Economic and Analytic Insights at Fiserv. Below are their answers on questions around economic trends, including mortgages, consumer spending, and artificial intelligence.

Q: It seems counter intuitive that mortgage delinquencies can be up while revolving and unsecured is trending down.  Are these different cohorts?

Maria Urtubey, Equifax: The 90+dpd mortgage delinquency (as of September 2025) is increasing year-over-year, but at a very low rate, from 0.57% to 0.73%. So any small movement represents a more drastic fluctuation than what is the case for bankcard and revolving and unsecured loans. Please refer to the delinquency details for these products in the Consumer Credit Trends Report: October 2025 - Portfolio

Q: Do you think the 50-year mortgage proposal is a cure to the housing affordability issue?

Dr. Robert Wescott, Wescott Strategic Advisors: Probably not. For one, the median age of a first-time homebuyer is now 40 years old, which means that many people’s loans would not be paid off until they were 90 years old. Even if a lower monthly payment due to a 50-year mortgage allowed some buyers to purchase a home younger than they would otherwise, 50 years would still be well into retirement years even for most people in their 20s and 30s. Importantly, the amount of interest paid over the life of the loan would be much higher compared to a 30-year mortgage. For instance, a 50-year mortgage would mean nearly $450,000 in additional interest on a $400,000 principal with a 6.5% fixed rate over a 30-year mortgage. 

And, it would also take longer for homeowners to build equity, with analysts noting that it would take more than ten years for many homeowners to have meaningful equity in their house, leaving them at major risk if they default or need to sell. Finally, extremely long-term mortgages are generally not very popular. In the 1990s, for example, Japan offered 100-year mortgages that were ultimately abandoned due to low uptake and impracticability.

Q: Do you think the ability to work remotely is impacting people's willingness to move?

Wescott: During the height of remote work, many people did move away from major employment hubs and some of these people got “locked in” to low pandemic-era mortgage rates, so some are reluctant to move and lose those rates. 

Other factors are changing. At the height of the pandemic, about 40% of U.S. workers were working remotely while only about 20% are now working remotely. So, remote workers are now a relatively smaller proportion of all workers, which means that remote work is probably having a more limited impact on moving decisions than it was a few years ago.

Q: With all these various factors – the AI spending boom, tariff and inflation risk, labor market weakening vs. unknown Federal Reserve actions – what factor do you think will weigh most heavily on the economy next year?  Do you think market valuations are overstretched and will pull back at some point?

Wescott: We believe that the biggest risk to the economy next year would be a slowdown in consumer spending. On the upper end of the “K curve,” we worry that a loss in stock market valuation could quickly ripple out to consumers and cause a significant drop in spending by high-income consumers. On the lower end of the “K curve,” a slowing labor market with continued weakness – which might be exacerbated by AI job impacts – could especially harm lower-income consumers.

Q: What are your thoughts on Las Vegas being a city where housing is less affordable yet more people are moving there? Is this an exception?

Wescott: Yes, there are often exceptions to trends, and, although we are not experts in specific regional housing markets like Las Vegas, there are a number of reasons that it could be attracting new residents despite relatively high housing costs. In the case of Las Vegas, these potential factors include low to no state taxes, good weather, ample job opportunities, and larger than typical median houses and lots that may give families more “bang for their buck.”

Q: After a government shutdown in past history, what was the economic bounce back percentage after reopening and average recovery time?

Wescott: Due to the extraordinary length of this most recent shutdown, the most comparable shutdown was the FY2019 shutdown that previously held the record for longest shutdown at 35 days. Retrospectively, the Congressional Budget Office found that the 2019 shutdown shaved about 0.1 percentage points off GDP growth per week it lasted – so about 0.5 percentage points in total. Nearly all the loss was regained in the subsequent quarter, such that only about 0.02 percentage points were permanently lost from GDP. 

Since atypical actions like large-scale federal layoffs were reversed and furloughed workers are receiving backpay, it is reasonable to conclude that the recent shutdown may follow a similar recovery trend as the 2019 shutdown—with a good portion of the lost business subsequently recovered.

Q: What are your odds of recession over the next 12 months?

Wescott: We believe that recession odds are around 35% over the next 12 months. Given considerable economic headwinds, we think a more likely outcome is a “growth pause” or “slow growth” scenario, with just 0.5%-1% annual growth in 2026.

Q: There have been various concerns about currency and the value of the dollar. Specifically, the concern is that the dollar will no longer be the reserve currency of the world.  Do you agree with this concern?  How imminent of a problem is this?

Wescott: Yes, we have been following this commentary. So-called “soft power” – which results from a favorable impression of the U.S. by other countries – has provided the U.S. with many economic benefits, notably attracting top international students, strong inbound tourism, and a market to export our cultural products, like films and music. Indeed, the dollar as the reserve currency of the world has been one of the most significant benefits that the U.S. gets from this soft power, and it is a risk that a declining impression of the U.S. abroad could jeopardize our financial soft power.

Q: Regarding consumer savings and investing trends: If they are not spending, are they building reserves and planning for the future?

Urtubey: As we noted, the younger generations are, as Daryl [Tyndorf, Director of Economic & Analytic Insights at Fiserv], called out, being cautious optimists. The older generations are continuing to save and as well as plan for the transition of that wealth. So, specific to this older generation group, it includes the pre-retired, baby boomers, retired baby boomers, and traditionalists, and although they represent about 44% of households, they own 56% of the wealth. So, they are planning on continuing to save and transitioning some of the wealth to their family members.

Q: Is there any fear or evidence of a possible AI bubble?

Wescott: That's the question that I am asked more than any other question these days, and yes, there is some concern about an AI bubble. So, there are measures of stock market pricing. There's one called the Shiller adjusted price-earnings ratio. Those numbers are, historically, in the 20s, but they are now in the 40s, so those would say the value is high. 

One other measure that I've been looking at is a chart that shows the single company of the stock market that had the biggest percentage of the S&P 500's overall value each year for the last 50 years, which goes back to the 1980s. NVIDIA is now about 8% of the total market cap of the S&P 500. No year in history have we ever had one company responsible for that much, and its price-earnings ratio was on the order of 55 or 58. So yes, there are concerns, and I think one of the biggest issues to watch is whether the stock market, and AI sector in particular, can keep supporting these values. 

AI is driving the stock market, the stock market is driving household wealth, and household wealth has still been underlying consumer spending, so I think there's a pretty direct link there and we should keep an eye on AI. One new concern that people worry about is that there are links between some of the AI companies, like ChatGPT and Microsoft. They have sharing agreements, and there is a big question of whether these companies can keep supporting each other as these links are not completely understood. So, I would keep watching AI.

Q: What is the impact of the U.S.’s $38 trillion in debt on the economy as a whole?

Wescott: Debt is sort of in the background as an issue until it's not in the background. It's still in the background right now. To me, it's like skating on ice, and the ice is getting thinner. You don't know when you're going to break through. 

So, economists like me don't want to have $38 trillion of debt. We would like to have smaller budget deficits. We'd like the country to pay down its debt or to at least not increase it. The debt in the hands of the public is now greater than 100% of GDP. There is no one simple rule that says if you get to 100%, then bad things will happen. But if you are skating on thinner and thinner ice and some news, not relating to bonds or debt, comes out that makes people nervous, it could start to undermine confidence in the bond market and that could cause interest rates to go up. 

In the U.K., we had a great example of this when, a few years ago, the then-Prime Minister Liz Truss announced a budget that wasn’t well-received and people believed it was going to widen budget deficits. Within 24 hours, the bond yield in the U.K. went from 4% to 5%. The Bank of England had to do an emergency intervention in the market. If your debt level gets too high, markets get nervous, and they can be knocked off kilter by something that's not even related to debt, so I wish we could take our debt problem more seriously.