The Fed raised its key rate by a quarter percentage point early this month, capping 5 points of increases in 14 months, its most aggressive such campaign in four decades. Perils of 11th hour debt limit deal Last-minute deal on debt ceiling could still spark recession even if US avoids default How much did the Fed recently raise interest rates? Rate cuts would juice the stock market and economy but risk another inflation spike. Since the 1950s, the median lag between the last rate hike and the first cut is just two months, LaVorgna says. LaVorgna points to prior recessions, noting the Fed typically reverses course from fighting inflation to trying to head off or minimize a downturn quickly as the economy weakens, seemingly contradicting itself. “There’s no way they’re going to be able to sit and watch (employment) come down” as job losses mount. economist for SMBC Group and a former top economic advisor in the Trump administration. “They’re not going to stick to their guns,” says Joe LaVorgna, chief U.S. Markets predict the Fed will lower interest rates by November and give 30% odds that it will make a move in September. There's a good chance the Fed has paused its aggressive interest rate hikes but repeatedly has signaled it probably won’t cut rates this year, even in a mild recession, because it wants to subdue a historic inflation surge.įinancial markets, and some economists, have a terse response: Nonsense. economy slips into a recession in the second half of the year, as most forecasters expect, the Federal Reserve says it will be doling out some tough love instead of a lifeline.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |