Shouldn't lower unemployment mitigate the bad debt component...

Shouldn't lower unemployment mitigate the bad debt component from rising?

Higher costs from the banks corporate lending are usually passed on to the consumer of debt as we see in the very rapid mortgagee rate rise of the whole 50bps.

There is currently 2 schools, inflation is based on the supply chain + supply side with very low jobless v demand side control like using IR and various bank lending prudential controls. I don't know which one will play out but as you pointed out, the bond yields are factoring the cost of capital and the soft commodities + energy is boosting basic inflation in manufacturing and directly on consumer at the pump.

So I don't think the CPI model is that accurate to a 'normal' consumer going about their daily lives. If what I read suggesting that we are that much indebted as a society, it won't take much hiking to destroy the demand side on consumer goods but energy is the most basic inflationary expense that requires no more war in Ukraine. Stagflation?