US margin debt fell $85B in July to $1.42T, the largest monthly decline on record, following record leverage buildup earlier in the year.
Macro & Markets ·
US margin debt contracted by $85 billion in July, falling to $1.42 trillion and marking the largest monthly decline ever recorded. The drop represents the first monthly decrease since March, following a period of elevated leverage in financial markets. The previous record monthly decline occurred in January 2022 at $80 billion, a period coinciding with emerging bear market conditions.
The July pullback came after a substantial buildup of leverage earlier in the year. Margin debt had increased by $198 billion across May and June alone, representing the largest two-month accumulation on record. This surge reflected aggressive use of borrowed capital by leveraged investors during that period.
Despite the sharp July reversal, margin debt remains significantly elevated relative to the start of 2025. Year-to-date growth stands at $518 billion, or 58 percent, indicating that the recent decline has not erased the substantial leverage accumulated over the prior months. Whether this contraction signals a shift in market risk appetite or represents a temporary correction remains unclear.