Interest rate hikes, bank failures, recession, oh my! Boy there has been a lot going on in the economy recently - let’s talk about it.
Yes - the Federal Reserve, yet again, raised the rate. Is that a surprise? No. From the beginning of their endeavor to curb inflation they have been crystal clear with their agenda. They will continue to raise the rate until they see an acceptable change.
More to come? Time will tell. The Fed may be signaling that they may pause hikes for now.
Bank Failures - 3 Banks since March have failed and been sold. The government clearly wants to signal to the nation that their money is safe, of the ones that were sold, its said the money is protected. Consumers also have protections from future failures depending on where and how you bank, but there are guaranteed amounts of protections in most cases.
More to come? We will see.
Recession? The Fed’s goal essentially was so slow massive price growth, in attempting to fight that, the economy likely will slow down. Likely there will be some job losses ( there already are), so will the GDP slow to the point of an actual recession? We will see.
Is it the same as 2008? What caused the Great Recession were outside influences within lending practices. The recession was caused by fraud, ultimately ( I am sure I am generalizing a bit here) but IF a recession is to happen now, it would be caused by manipulation of the market, essentially, on purpose.
What’s to come? The constant combat between inflation and fighting it is a cycle. Once inflation is curbed, whether that means recession or not, things will ease. There may be some changes, hardship, and job losses along the way, but, all to plan, things will play out lightly.
Again, these are just my observations and opinions. What are yours? Drop a comment - let’s chat!
#realestate #economy #recession #bankfailure #oldrepublic #siliconvalleybank #thefed
