CNN posted an article regarding the Federal reserve possibly raising by almost 1 percent this coming wednesday which will be its 4th increase this year. The interest rate is also projected to increase this December. With the constant rising in interest rates the public is concerned that the Federal Reserve is sending the economy into a recession. There are many indications that point to the possibility of a recession on the horizon, the housing market is beginning to show struggles for the future with mortgage rates increasing in massive increments. The Fed is also adamant about continuing to increase interest rates as they feel it will allow the economy to slow down and hopefully bring down inflation rate. By looking at the trends and how well the job market is doing right now it can be assumed that the Federal Reserve will continue to hike up interest rates at the rate they are because as per statistics the job market is up almost 200,000 jobs this month compared to last month where we experienced almost 300,000 jobs lost. Looking at this activity the main question is when will the end of this seemingly never ending price increase begin, with this being said it is likely that the Fed will continue to increase interest as many professionals feel we as a country are coming to the end of this recession very soon. I think this economic activity will cause another housing market crash, we are already seeing signs of the housing market slowly declining.
https://www.cnn.com/2022/10/30/investing/stocks-week-ahead/index.html
The increasing interest rates from the Fed seem like a necessary but painful experience for the economy. The process of how the Fed tries to cool down the economy is very interesting and is truly just a great example of how the economy works. However actually seeing it in action can be a painful process for the consumer and businesses alike.
ReplyDeleteI find that really interesting because the article that I focused on this month also focused on the inflation rate and the policies that the FED is enacting to try to help the economy. I do agree with you that it is probably doing more harm than good in the long run seeing as recent figures have shown that the inflation rate still rising.
ReplyDeleteIt's crazy how much inflation has caused interest rates to rise and how even despite the interest rates rising the inflation doesn't seem to decrease and the interest rates are only seeming to impact the economy negatively by hurting the housing market
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