Company: KEY-PI
Filing Date: 2025-11-04
Form Type: 10-Q
Source: 0001628280-25-048757
Chunk: 157

Company: KEYCORP /NEW/
Filing Date: 2025-11-04
Form: 10-Q
Item: Item 1
Chunk 157
---
, property values, and other factors associated with the credit losses on financial assets. Some macroeconomic variables apply to all portfolio segments, while others are more portfolio specific. The following table discloses key macroeconomic variables for each loan portfolio.

56

SegmentPortfolioKey Macroeconomic Variables (a)CommercialCommercial and industrialBBB corporate bond rate (spread), fixed investment, business bankruptcies, GDP, industrial production, unemployment rate, and Producer Price IndexCommercial real estateProperty & real estate price indices, unemployment rate, business bankruptcies, GDP, and SOFRCommercial lease financingBBB corporate bond rate (spread), GDP, and unemployment rateConsumerReal estate — residential mortgageGDP, home price index, unemployment rate, 30 year mortgage rate and U.S. household incomeHome equityHome price index, unemployment rate, and 30 year mortgage rateOther consumerUnemployment rate, prime rate and U.S. household incomeCredit cardsUnemployment rate and U.S. household incomeDiscontinued operationsUnemployment rate(a)Variables include all transformations and interactions with other risk drivers. Additionally, variables may have varying impacts at different points in the economic cycle.In addition to macroeconomic drivers, portfolio attributes such as remaining term, outstanding balance, risk ratings, utilization, FICO, LTV, and delinquency also drive ALLL changes. Our ALLL models were designed to capture the correlation between economic and portfolio changes. As such, evaluating shifts in individual portfolio attributes and macroeconomic variables in isolation may not be indicative of past or future performance. Economic OutlookAs of September 30, 2025, the economy continues to be resilient, but shows signs of slowing down. Growth is weakening, inflationary pressures continue, and policy uncertainty adds to the existing economic pressures.We utilized the Moody’s August 2025 Consensus forecast as the baseline forecast to estimate our expected credit losses as of September 30, 2025. This baseline scenario reflects slowing growth over the next two years, but no recession. U.S. GDP is expected to grow at an annual rate of 1.7% for 2025 and 2026. The expected National Unemployment Rate is forecasted to peak at 4.5% in mid-2026. The U.S. Consumer Price Index is forecasted to remain close to 3% through late 2026. The Federal Funds Rate decreases gradually over the next year, settling near 3%.The geopolitical environment remains both uncertain and complex, which poses potential downside-risks to the economic outlook over the next two years