Charge Off Predictions for Q3 2017 through Q2 2018

The Fed should issue the charge-off and delinquency rates for 3rd quarter of 2017 on or about November 18.

As we’ve done every quarter over the past few years, following is RDS’ predictions for the soon-to-be-reported value of charge-off rates on all types of consumers loans through the 2nd quarter of 2018.

As a reference, RDS uses a proprietary Error Correct Model to predict trends in the charge-off rates. For a more in-depth understanding of the ECM, check out this earlier post.

A few notes about this latest prediction:

We expect the charge-off rate trends to increase through the end of 2017, relative to previous years
Though we are still seeing an increase, the new forecast is not as steep as last quarter’s projection.
The big variable question mark is 4th quarter rates. It is still possible we will see a big jump in Q4, much like happened last year.

We will obviously update Q4 projections in our next quarterly charge-off post.