THE SOCIAL MEDIA PLATFORM DROPPED 13% IN AFTER-HOURS TRADING TODAY. OTHER BIG TECH COMPANIES LIKE META AND PINTEREST ARE EXPECTED TO SHARE THEIR EARNINGS REPORTS NEXT WEEK. >>> CHILDCARE COULD BE GETTING EVEN MORE EXPENSIVE. FEDERAL FUNDING PACKAGES THAT WERE PASSED DURING COVID ARE SET TO EXPIRE IN THE NEXT TWO YEARS, INCLUDING $24 BILLION THAT WAS ALLOCATED TO STABILIZE COSTS, WHICH WILL BE LIFTED IN SEPTEMBER. >>> THE FEDERAL RESERVE IS EXPECTED TO ANNOUNCE YET ANOTHER INTEREST RATE HIKE TODAY. THIS TIME BY ONE QUARTER OF A PERCENTAGE POINT. IT WOULD MARK THE EIGHTH ROUND OF RATE HIKES SINCE MARCH, AS THE FED TRIES TO CURB INFLATION. >>> BANKS ARE BRACING FOR AN INFLUX OF DEFAULT IN PAYMENT AS HIGHER PRICES ACROSS THE BOARD FORCE AMERICANS TO USE CREDIT CARDS. IT COMES AS OVER HALF OF AMERICANS EARNING A SIX FIGURE SALARY REPORT THEY ARE ACTUALLY LIVING PAYCHECK TO PAYCHECK. TO HELP US BREAK DOWN ALL OF THIS IS MEGAN LENHART, A SENIOR REPORTER FOR FORTUNE MAGAZINE. THANK YOU FOR JOINING US. YOU KNOW, A LOT OF PEOPLE ARE GOING TO HERE YOU MAKE 100 GRAND A YEAR AND YOU ARE LIVING PAYCHECK TO PAYCHECK, IT SEEMS LIKE CRAZY TALK. IT IS ACTUALLY HAPPENING. WE WILL GET TO THAT IN A MINUTE. FIRST, I WANT TO SEE WHAT THE BANKS ARE DOING. WHAT ARE THE BANKS BRACING FOR AND PUTTING MONEY ASIDE FOR PEOPLE ESSENTIALLY DEFAULTING ON LOANS? WHAT HAPPENS IF A LARGE NUMBER OF PEOPLE START TO DEFAULT ON THEIR PAYMENTS, WHETHER THAT IS CREDIT CARDS OR THEIR CAR PAYMENTS OR WHATEVER IT IS? >> I APPRECIATE YOU HAVING ME THIS MORNING. I THINK THIS IS AN IMPORTANT TOPIC WE NEED TO TALK ABOUT OVER AND OVER AGAIN IN THE COMING YEAR. CERTAINLY, LAST YEAR AND THROUGHOUT THE EARLY DAYS OF THE PANDEMIC, YOU KNOW, WE HAVE SEEN THAT CREDIT CARD DELINQUENCIES HAVE BEEN HISTORICALLY LOW. NOW WE ARE GETTING INTO A RAMP UP PERIOD, GIVEN INFLATION, GIVEN THE ECONOMIC ENVIRONMENT WE HAVE BEEN IN, WE WILL SEE MORE PEOPLE SITTING THERE AND SAY, I CAN'T PAY MY CREDIT CARD AT THE END OF THE MONTH. I WANT TO STRESS, AGAIN, WE HAVE BEEN IN A HISTORICALLY LOW ENVIRONMENT. TRANS UNION AND OTHER EXPERTS SAY WE WILL GO FROM 2% TO MAYBE 2.6% THIS YEAR. GRANTED, IT IS STILL MUCH LOWER THAN SOME OF THOSE CRAZY HIGH RATES WE SAW DURING THE FINANCIAL CRISIS. DELINQUENCIES WERE SOMEWHERE IN THE 2.2 RANGE. NOTHING TOO CRAZY, BUT THAT DOES, OBVIOUSLY HAVE RIPPLE EFFECTS. WE ARE SEEING CREDIT CARD COMPANIES AND BANKS TIGHTENING LEND DURING STANDARDS AND PUT MORE MONEY ON THE BOOKS TO MAKE SURE WE HAVE ENOUGH TO COVER THIS IF IT BECOMES A PROBLEM. >> YOU JUST BROUGHT UP SOMETHING, YOU ARE RIGHT, DURING THE PANDEMIC, MANY PEOPLE WERE STILL WORKING BUT THEY WERE GETTING ADDITIONAL FUNDING FROM THE GOVERNMENT. PEOPLE WERE PAYING DOWN THEIR CREDIT CARDS. IT WAS FANTASTIC. IT WAS LIKE WE DIDN'T LEARN A LESSON AT ALL OR THE TABLES TURNED QUITE RAPIDLY. NOW WE ARE CHARGING MORE THAN WE EVER HAVE, NOT MORE THAN WE EVER HAVE BUT WE HAVE CHANGED THE TRAJECTORY. WHY IS THAT HAPPENING? WHY DIDN'T PEOPLE PAY DOWN THEIR CREDIT CARDS AND KEEP IT THAT WAY? >> I THINK WE ARE FACING A DOUBLE WHAMMY HERE. WE ARE SITTING HERE AND HAVING SO MANY AMERICAN HOUSEHOLDS HAVE FIVE INFLATION, FIRST WE SAW GAS PRICES AND CAR PRICES GO UP. NOW WE SEE IT ACROSS THE BOARD. THE PRICE OF EGGS IS JUST CRAZY THESE DAYS, RIGHT? >> YEAH. >> WE ALSO SEE HIGH INTEREST RATES. OBVIOUSLY, THE FEDERAL RESERVE IS REALLY TRYING TO TAMP DOWN ON INFLATION. THE RATES ARE INCREASING SO WE WILL SIT THERE AND START TO SEE YOU MAY BE PUTTING LESS ON THE CREDIT CARD BUT THE INTEREST RATES ARE HIGHER IF YOU ARE CARRYING THAT DEBT FOR LONGER PERIODS OF TIME. >> THAT BRINGS ME TO THIS REALLY INTERESTING STATISTIC THAT MORE AND MORE PEOPLE THAT MAKE AT LEAST 100 K A YEAR SAY THEY ARE LIVING PAYCHECK TO PAYCHECK. THE PERCENTAGE NUMBER HAS BEEN TAKING UP SINCE THE SUMMER. I THINK IT WAS IN THE 30s IN THE SUMMER AND NOW IT IS MUCH HIGHER THAN THAT, IN TERMS OF THE PERCENTAGE OF PEOPLE SAYING THAT. A LOT OF PEOPLE HERE, YOU MAKE 100 GRAND, I DON'T GET IT. HOW CAN YOU MAKE THAT AMOUNT OF MONEY AND LIVE PAYCHECK TO PAYCHECK? >> IT IS INTERESTING. WE SEE THIS ACROSS THE BOARD. ALMOST 2/3 OF AMERICANS ARE LIVING PAYCHECK TO PAYCHECK. WE ARE SEEING, REALLY, WHEN IT COMES TO LOWER AND MIDDLE INCOME AMERICANS, THOSE RATES ARE STAYING FAIRLY STABLE. WE SEE THE INCREASE AMONG THOSE WHO ARE HIGHER EARNING AMERICANS. OF COURSE, IT IS ONE OF THOSE SITUATIONS, WHEN YOU LOOK AT IT ON FIRST GLANCE, MY GOD, YOU CAN'T PAY YOUR BILLS? IT IS A MATTER OF A COUPLE OF ISSUES. WE ARE OBVIOUSLY SEEING INFLATION HIT THESE HOUSEHOLDS. MAYBE THEY WERE ABLE TO CARRY THAT A LITTLE BIT LONGER. THEY NEED TO MAKE SOME ADJUSTMENTS NOW BUT WE ALSO SEE ECONOMIC SHIFTS. THERE HAVE BEEN VOLATILE MARKETS AND A NUMBER OF ISSUES, AGAIN, HIGH
