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Biggest downside risk still growing

According to fourth-quarter financial flows and balance sheet data, household borrowing continues to expand at a pretty rapid pace. Even though the debt-to-income ratio may have fallen slightly in the fourth quarter household leverage continued to rise, with the debt-to-asset ratio hitting a record high. Looking forward, this year's surge in auto sales and continued strength in existing home sales indicate that household borrowing and spending most likely remained strong this quarter too. 

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