Banks have started to tighten their credit  conditions and expect to further tighten them markedly in the coming quarters. Given the prevailing uncertainty, normalisation should remain gradual. For now, our aim should be to avoid high near-term imported inflation becoming entrenched by feeding into higher inflation expectations.
For example, many adjustable-rate mortgages start off with a fixed rate for several years, providing households with some protection from rising rates. This relatively upbeat assessment of household credit quality seems to be shared by lenders and by investors in securities backed by consumer debt.