Stocks aren't the only assets that significantly lost value when expensive money scared investors to avoid risks. The prices of government bonds and real estate were also shot down, and cryptocurrencies will not certainly be in the situation to escape a fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere as well.<\/p>\n\n\n\n
To put it short, if we see turmoil in the traditional financial markets, all other markets will feel turbulence.<\/p>\n","post_title":"U.S. Central Bank Raising Rates By 25 BPS In May; Repercussions On Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-central-bank-raising-rates-by-25-bps-in-may-repercussions-on-financial-markets","to_ping":"","pinged":"","post_modified":"2023-04-19 14:30:22","post_modified_gmt":"2023-04-19 04:30:22","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11038","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};
Cryptocurrencies, Bonds, Real Estate Are Collateral<\/h2>\n\n\n\n
Stocks aren't the only assets that significantly lost value when expensive money scared investors to avoid risks. The prices of government bonds and real estate were also shot down, and cryptocurrencies will not certainly be in the situation to escape a fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere as well.<\/p>\n\n\n\n
To put it short, if we see turmoil in the traditional financial markets, all other markets will feel turbulence.<\/p>\n","post_title":"U.S. Central Bank Raising Rates By 25 BPS In May; Repercussions On Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-central-bank-raising-rates-by-25-bps-in-may-repercussions-on-financial-markets","to_ping":"","pinged":"","post_modified":"2023-04-19 14:30:22","post_modified_gmt":"2023-04-19 04:30:22","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11038","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};
\"Another epic bubble in financial markets is bursting. The best we can hope for is a fall of about 27% from current levels, while the worst-case scenario would see a plunge of more than 50%.\"<\/em><\/p>\n\n\n\n
Cryptocurrencies, Bonds, Real Estate Are Collateral<\/h2>\n\n\n\n
Stocks aren't the only assets that significantly lost value when expensive money scared investors to avoid risks. The prices of government bonds and real estate were also shot down, and cryptocurrencies will not certainly be in the situation to escape a fall. The crypto market displayed a high correlation with U.S. equities. If a downtrend is witnessed in the stock market, the same is usually replicated in the crypto-sphere as well.<\/p>\n\n\n\n
To put it short, if we see turmoil in the traditional financial markets, all other markets will feel turbulence.<\/p>\n","post_title":"U.S. Central Bank Raising Rates By 25 BPS In May; Repercussions On Financial Markets","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"u-s-central-bank-raising-rates-by-25-bps-in-may-repercussions-on-financial-markets","to_ping":"","pinged":"","post_modified":"2023-04-19 14:30:22","post_modified_gmt":"2023-04-19 04:30:22","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11038","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"}],"next":false,"total_page":false},"paged":1,"class":"jblog_block_13"};
The recent collapse of Silicon Valley Bank was partly triggered by losses on its bond holdings as interest rates jumped and prices of U.S. government debt fell. Jeremy Grantham warned that the turmoil that swept through the banking sector last month is just the beginning. Jeremy Grantham made his name predicting the dot-com crash in 2000 and the financial crisis in 2008, and he is now warning<\/a>:<\/p>\n\n\n\n
Corporate profits are emerging as the big driver of what the market is likely to do in the near term, and according to Refinitiv IBES data, S&P 500 company earnings are expected to have declined 4.8% in the first quarter compared with the same period last year. The second quarter could be an even worst story, and Steven Blitz, a chief U.S. economist at TS Lombard, said<\/a> that he expects negative growth in Q2, with recession to start by mid-year.<\/p>\n\n\n\n
At last glance, financial markets have priced in an 80% likelihood of that happening, and it is still not sure when the central bank would pause its monetary policy tightening. Because of this, economists are worried that an aggressive Federal Reserve will push the economy into a recession, and according to the famous investor Jeremy Grantham, the U.S. stock market could experience significant losses over the coming months. The federal funds rate is now in a range of 4.75% to 5%, which is the highest level since the 2006 year, and a recommendation is that investors should continue to take a defensive investment approach in the upcoming weeks.<\/p>\n\n\n\n
Corporate profits are emerging as the big driver of what the market is likely to do in the near term, and according to Refinitiv IBES data, S&P 500 company earnings are expected to have declined 4.8% in the first quarter compared with the same period last year. The second quarter could be an even worst story, and Steven Blitz, a chief U.S. economist at TS Lombard, said<\/a> that he expects negative growth in Q2, with recession to start by mid-year.<\/p>\n\n\n\n
At last glance, financial markets have priced in an 80% likelihood of that happening, and it is still not sure when the central bank would pause its monetary policy tightening. Because of this, economists are worried that an aggressive Federal Reserve will push the economy into a recession, and according to the famous investor Jeremy Grantham, the U.S. stock market could experience significant losses over the coming months. The federal funds rate is now in a range of 4.75% to 5%, which is the highest level since the 2006 year, and a recommendation is that investors should continue to take a defensive investment approach in the upcoming weeks.<\/p>\n\n\n\n
Corporate profits are emerging as the big driver of what the market is likely to do in the near term, and according to Refinitiv IBES data, S&P 500 company earnings are expected to have declined 4.8% in the first quarter compared with the same period last year. The second quarter could be an even worst story, and Steven Blitz, a chief U.S. economist at TS Lombard, said<\/a> that he expects negative growth in Q2, with recession to start by mid-year.<\/p>\n\n\n\n
Investors continue to watch carefully comments from Federal Reserve officials that could give more insight into the path of interest rates, but it is important to say that the U.S. central bank is widely seen raising rates by 25 basis points next month. The latest economic data, including retail sales, industrial production, and consumer sentiment, cemented this expectation, and according to analysts, the U.S. economy still has some vibrancy, which gives the Fed cover to continue its rate hike policy in May.<\/p>\n\n\n\n<\/figure>\n\n\n\n
At last glance, financial markets have priced in an 80% likelihood of that happening, and it is still not sure when the central bank would pause its monetary policy tightening. Because of this, economists are worried that an aggressive Federal Reserve will push the economy into a recession, and according to the famous investor Jeremy Grantham, the U.S. stock market could experience significant losses over the coming months. The federal funds rate is now in a range of 4.75% to 5%, which is the highest level since the 2006 year, and a recommendation is that investors should continue to take a defensive investment approach in the upcoming weeks.<\/p>\n\n\n\n
Corporate profits are emerging as the big driver of what the market is likely to do in the near term, and according to Refinitiv IBES data, S&P 500 company earnings are expected to have declined 4.8% in the first quarter compared with the same period last year. The second quarter could be an even worst story, and Steven Blitz, a chief U.S. economist at TS Lombard, said<\/a> that he expects negative growth in Q2, with recession to start by mid-year.<\/p>\n\n\n\n
Overall, the impact of interest rate changes on the economy is complex and multifaceted. While higher interest rates can help tackle inflation, they can also exacerbate a slowdown in the economy and lead to a recession. As the Fed prepares to make its decision, the financial world will closely monitor the situation to see how the US economy will be affected.<\/p>\n","post_title":"United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-enter-mild-recession-as-yet-another-hike-in-fed-rates-expected","to_ping":"","pinged":"","post_modified":"2023-05-04 13:03:34","post_modified_gmt":"2023-05-04 03:03:34","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11418","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11038,"post_author":"14","post_date":"2023-04-19 14:28:51","post_date_gmt":"2023-04-19 04:28:51","post_content":"\n
Investors continue to watch carefully comments from Federal Reserve officials that could give more insight into the path of interest rates, but it is important to say that the U.S. central bank is widely seen raising rates by 25 basis points next month. The latest economic data, including retail sales, industrial production, and consumer sentiment, cemented this expectation, and according to analysts, the U.S. economy still has some vibrancy, which gives the Fed cover to continue its rate hike policy in May.<\/p>\n\n\n\n<\/figure>\n\n\n\n
At last glance, financial markets have priced in an 80% likelihood of that happening, and it is still not sure when the central bank would pause its monetary policy tightening. Because of this, economists are worried that an aggressive Federal Reserve will push the economy into a recession, and according to the famous investor Jeremy Grantham, the U.S. stock market could experience significant losses over the coming months. The federal funds rate is now in a range of 4.75% to 5%, which is the highest level since the 2006 year, and a recommendation is that investors should continue to take a defensive investment approach in the upcoming weeks.<\/p>\n\n\n\n
Corporate profits are emerging as the big driver of what the market is likely to do in the near term, and according to Refinitiv IBES data, S&P 500 company earnings are expected to have declined 4.8% in the first quarter compared with the same period last year. The second quarter could be an even worst story, and Steven Blitz, a chief U.S. economist at TS Lombard, said<\/a> that he expects negative growth in Q2, with recession to start by mid-year.<\/p>\n\n\n\n
Overall, the impact of interest rate changes on the economy is complex and multifaceted. While higher interest rates can help tackle inflation, they can also exacerbate a slowdown in the economy and lead to a recession. As the Fed prepares to make its decision, the financial world will closely monitor the situation to see how the US economy will be affected.<\/p>\n","post_title":"United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-enter-mild-recession-as-yet-another-hike-in-fed-rates-expected","to_ping":"","pinged":"","post_modified":"2023-05-04 13:03:34","post_modified_gmt":"2023-05-04 03:03:34","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11418","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11038,"post_author":"14","post_date":"2023-04-19 14:28:51","post_date_gmt":"2023-04-19 04:28:51","post_content":"\n
Investors continue to watch carefully comments from Federal Reserve officials that could give more insight into the path of interest rates, but it is important to say that the U.S. central bank is widely seen raising rates by 25 basis points next month. The latest economic data, including retail sales, industrial production, and consumer sentiment, cemented this expectation, and according to analysts, the U.S. economy still has some vibrancy, which gives the Fed cover to continue its rate hike policy in May.<\/p>\n\n\n\n<\/figure>\n\n\n\n
At last glance, financial markets have priced in an 80% likelihood of that happening, and it is still not sure when the central bank would pause its monetary policy tightening. Because of this, economists are worried that an aggressive Federal Reserve will push the economy into a recession, and according to the famous investor Jeremy Grantham, the U.S. stock market could experience significant losses over the coming months. The federal funds rate is now in a range of 4.75% to 5%, which is the highest level since the 2006 year, and a recommendation is that investors should continue to take a defensive investment approach in the upcoming weeks.<\/p>\n\n\n\n
Corporate profits are emerging as the big driver of what the market is likely to do in the near term, and according to Refinitiv IBES data, S&P 500 company earnings are expected to have declined 4.8% in the first quarter compared with the same period last year. The second quarter could be an even worst story, and Steven Blitz, a chief U.S. economist at TS Lombard, said<\/a> that he expects negative growth in Q2, with recession to start by mid-year.<\/p>\n\n\n\n
However, the banking sector may benefit from higher interest rates since they can earn more money on the dollars they loan out. Money market and certificate of deposit (CD) rates may also increase, boosting savings among consumers and businesses. Higher interest rates may also cool demand in the housing sector, but they may not be as effective at reducing consumer impulse purchasing.<\/p>\n\n\n\n
All Eyes On The United States<\/h3>\n\n\n\n
Overall, the impact of interest rate changes on the economy is complex and multifaceted. While higher interest rates can help tackle inflation, they can also exacerbate a slowdown in the economy and lead to a recession. As the Fed prepares to make its decision, the financial world will closely monitor the situation to see how the US economy will be affected.<\/p>\n","post_title":"United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-enter-mild-recession-as-yet-another-hike-in-fed-rates-expected","to_ping":"","pinged":"","post_modified":"2023-05-04 13:03:34","post_modified_gmt":"2023-05-04 03:03:34","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11418","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11038,"post_author":"14","post_date":"2023-04-19 14:28:51","post_date_gmt":"2023-04-19 04:28:51","post_content":"\n
Investors continue to watch carefully comments from Federal Reserve officials that could give more insight into the path of interest rates, but it is important to say that the U.S. central bank is widely seen raising rates by 25 basis points next month. The latest economic data, including retail sales, industrial production, and consumer sentiment, cemented this expectation, and according to analysts, the U.S. economy still has some vibrancy, which gives the Fed cover to continue its rate hike policy in May.<\/p>\n\n\n\n<\/figure>\n\n\n\n
At last glance, financial markets have priced in an 80% likelihood of that happening, and it is still not sure when the central bank would pause its monetary policy tightening. Because of this, economists are worried that an aggressive Federal Reserve will push the economy into a recession, and according to the famous investor Jeremy Grantham, the U.S. stock market could experience significant losses over the coming months. The federal funds rate is now in a range of 4.75% to 5%, which is the highest level since the 2006 year, and a recommendation is that investors should continue to take a defensive investment approach in the upcoming weeks.<\/p>\n\n\n\n
Corporate profits are emerging as the big driver of what the market is likely to do in the near term, and according to Refinitiv IBES data, S&P 500 company earnings are expected to have declined 4.8% in the first quarter compared with the same period last year. The second quarter could be an even worst story, and Steven Blitz, a chief U.S. economist at TS Lombard, said<\/a> that he expects negative growth in Q2, with recession to start by mid-year.<\/p>\n\n\n\n
Savings May Grow, But The Housing Sector May Face A Slowdown<\/h3>\n\n\n\n
However, the banking sector may benefit from higher interest rates since they can earn more money on the dollars they loan out. Money market and certificate of deposit (CD) rates may also increase, boosting savings among consumers and businesses. Higher interest rates may also cool demand in the housing sector, but they may not be as effective at reducing consumer impulse purchasing.<\/p>\n\n\n\n
All Eyes On The United States<\/h3>\n\n\n\n
Overall, the impact of interest rate changes on the economy is complex and multifaceted. While higher interest rates can help tackle inflation, they can also exacerbate a slowdown in the economy and lead to a recession. As the Fed prepares to make its decision, the financial world will closely monitor the situation to see how the US economy will be affected.<\/p>\n","post_title":"United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-enter-mild-recession-as-yet-another-hike-in-fed-rates-expected","to_ping":"","pinged":"","post_modified":"2023-05-04 13:03:34","post_modified_gmt":"2023-05-04 03:03:34","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11418","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11038,"post_author":"14","post_date":"2023-04-19 14:28:51","post_date_gmt":"2023-04-19 04:28:51","post_content":"\n
Investors continue to watch carefully comments from Federal Reserve officials that could give more insight into the path of interest rates, but it is important to say that the U.S. central bank is widely seen raising rates by 25 basis points next month. The latest economic data, including retail sales, industrial production, and consumer sentiment, cemented this expectation, and according to analysts, the U.S. economy still has some vibrancy, which gives the Fed cover to continue its rate hike policy in May.<\/p>\n\n\n\n<\/figure>\n\n\n\n
At last glance, financial markets have priced in an 80% likelihood of that happening, and it is still not sure when the central bank would pause its monetary policy tightening. Because of this, economists are worried that an aggressive Federal Reserve will push the economy into a recession, and according to the famous investor Jeremy Grantham, the U.S. stock market could experience significant losses over the coming months. The federal funds rate is now in a range of 4.75% to 5%, which is the highest level since the 2006 year, and a recommendation is that investors should continue to take a defensive investment approach in the upcoming weeks.<\/p>\n\n\n\n
Corporate profits are emerging as the big driver of what the market is likely to do in the near term, and according to Refinitiv IBES data, S&P 500 company earnings are expected to have declined 4.8% in the first quarter compared with the same period last year. The second quarter could be an even worst story, and Steven Blitz, a chief U.S. economist at TS Lombard, said<\/a> that he expects negative growth in Q2, with recession to start by mid-year.<\/p>\n\n\n\n
Higher interest rates also increase the cost of borrowing money, leading to a decrease in demand for goods and services. This, in turn, can cause businesses to cut back on production, potentially leading to layoffs and increased unemployment.<\/p>\n\n\n\n
Savings May Grow, But The Housing Sector May Face A Slowdown<\/h3>\n\n\n\n
However, the banking sector may benefit from higher interest rates since they can earn more money on the dollars they loan out. Money market and certificate of deposit (CD) rates may also increase, boosting savings among consumers and businesses. Higher interest rates may also cool demand in the housing sector, but they may not be as effective at reducing consumer impulse purchasing.<\/p>\n\n\n\n
All Eyes On The United States<\/h3>\n\n\n\n
Overall, the impact of interest rate changes on the economy is complex and multifaceted. While higher interest rates can help tackle inflation, they can also exacerbate a slowdown in the economy and lead to a recession. As the Fed prepares to make its decision, the financial world will closely monitor the situation to see how the US economy will be affected.<\/p>\n","post_title":"United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-enter-mild-recession-as-yet-another-hike-in-fed-rates-expected","to_ping":"","pinged":"","post_modified":"2023-05-04 13:03:34","post_modified_gmt":"2023-05-04 03:03:34","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11418","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11038,"post_author":"14","post_date":"2023-04-19 14:28:51","post_date_gmt":"2023-04-19 04:28:51","post_content":"\n
Investors continue to watch carefully comments from Federal Reserve officials that could give more insight into the path of interest rates, but it is important to say that the U.S. central bank is widely seen raising rates by 25 basis points next month. The latest economic data, including retail sales, industrial production, and consumer sentiment, cemented this expectation, and according to analysts, the U.S. economy still has some vibrancy, which gives the Fed cover to continue its rate hike policy in May.<\/p>\n\n\n\n<\/figure>\n\n\n\n
At last glance, financial markets have priced in an 80% likelihood of that happening, and it is still not sure when the central bank would pause its monetary policy tightening. Because of this, economists are worried that an aggressive Federal Reserve will push the economy into a recession, and according to the famous investor Jeremy Grantham, the U.S. stock market could experience significant losses over the coming months. The federal funds rate is now in a range of 4.75% to 5%, which is the highest level since the 2006 year, and a recommendation is that investors should continue to take a defensive investment approach in the upcoming weeks.<\/p>\n\n\n\n
Corporate profits are emerging as the big driver of what the market is likely to do in the near term, and according to Refinitiv IBES data, S&P 500 company earnings are expected to have declined 4.8% in the first quarter compared with the same period last year. The second quarter could be an even worst story, and Steven Blitz, a chief U.S. economist at TS Lombard, said<\/a> that he expects negative growth in Q2, with recession to start by mid-year.<\/p>\n\n\n\n
Higher interest rates also increase the cost of borrowing money, leading to a decrease in demand for goods and services. This, in turn, can cause businesses to cut back on production, potentially leading to layoffs and increased unemployment.<\/p>\n\n\n\n
Savings May Grow, But The Housing Sector May Face A Slowdown<\/h3>\n\n\n\n
However, the banking sector may benefit from higher interest rates since they can earn more money on the dollars they loan out. Money market and certificate of deposit (CD) rates may also increase, boosting savings among consumers and businesses. Higher interest rates may also cool demand in the housing sector, but they may not be as effective at reducing consumer impulse purchasing.<\/p>\n\n\n\n
All Eyes On The United States<\/h3>\n\n\n\n
Overall, the impact of interest rate changes on the economy is complex and multifaceted. While higher interest rates can help tackle inflation, they can also exacerbate a slowdown in the economy and lead to a recession. As the Fed prepares to make its decision, the financial world will closely monitor the situation to see how the US economy will be affected.<\/p>\n","post_title":"United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-enter-mild-recession-as-yet-another-hike-in-fed-rates-expected","to_ping":"","pinged":"","post_modified":"2023-05-04 13:03:34","post_modified_gmt":"2023-05-04 03:03:34","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11418","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11038,"post_author":"14","post_date":"2023-04-19 14:28:51","post_date_gmt":"2023-04-19 04:28:51","post_content":"\n
Investors continue to watch carefully comments from Federal Reserve officials that could give more insight into the path of interest rates, but it is important to say that the U.S. central bank is widely seen raising rates by 25 basis points next month. The latest economic data, including retail sales, industrial production, and consumer sentiment, cemented this expectation, and according to analysts, the U.S. economy still has some vibrancy, which gives the Fed cover to continue its rate hike policy in May.<\/p>\n\n\n\n<\/figure>\n\n\n\n
At last glance, financial markets have priced in an 80% likelihood of that happening, and it is still not sure when the central bank would pause its monetary policy tightening. Because of this, economists are worried that an aggressive Federal Reserve will push the economy into a recession, and according to the famous investor Jeremy Grantham, the U.S. stock market could experience significant losses over the coming months. The federal funds rate is now in a range of 4.75% to 5%, which is the highest level since the 2006 year, and a recommendation is that investors should continue to take a defensive investment approach in the upcoming weeks.<\/p>\n\n\n\n
Corporate profits are emerging as the big driver of what the market is likely to do in the near term, and according to Refinitiv IBES data, S&P 500 company earnings are expected to have declined 4.8% in the first quarter compared with the same period last year. The second quarter could be an even worst story, and Steven Blitz, a chief U.S. economist at TS Lombard, said<\/a> that he expects negative growth in Q2, with recession to start by mid-year.<\/p>\n\n\n\n
When the Fed raises interest rates, the prime rate (Bank Prime Loan Rate) also jumps, leading to higher credit card and other loan rates based on individual risk profiles. Short-term borrowing will have higher rates than long-term borrowing. Meanwhile, fixed-income investors may see a negative impact on their investments.<\/p>\n\n\n\n
Cost Of Borrowing Will Increase<\/h3>\n\n\n\n
Higher interest rates also increase the cost of borrowing money, leading to a decrease in demand for goods and services. This, in turn, can cause businesses to cut back on production, potentially leading to layoffs and increased unemployment.<\/p>\n\n\n\n
Savings May Grow, But The Housing Sector May Face A Slowdown<\/h3>\n\n\n\n
However, the banking sector may benefit from higher interest rates since they can earn more money on the dollars they loan out. Money market and certificate of deposit (CD) rates may also increase, boosting savings among consumers and businesses. Higher interest rates may also cool demand in the housing sector, but they may not be as effective at reducing consumer impulse purchasing.<\/p>\n\n\n\n
All Eyes On The United States<\/h3>\n\n\n\n
Overall, the impact of interest rate changes on the economy is complex and multifaceted. While higher interest rates can help tackle inflation, they can also exacerbate a slowdown in the economy and lead to a recession. As the Fed prepares to make its decision, the financial world will closely monitor the situation to see how the US economy will be affected.<\/p>\n","post_title":"United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-enter-mild-recession-as-yet-another-hike-in-fed-rates-expected","to_ping":"","pinged":"","post_modified":"2023-05-04 13:03:34","post_modified_gmt":"2023-05-04 03:03:34","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11418","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11038,"post_author":"14","post_date":"2023-04-19 14:28:51","post_date_gmt":"2023-04-19 04:28:51","post_content":"\n
Investors continue to watch carefully comments from Federal Reserve officials that could give more insight into the path of interest rates, but it is important to say that the U.S. central bank is widely seen raising rates by 25 basis points next month. The latest economic data, including retail sales, industrial production, and consumer sentiment, cemented this expectation, and according to analysts, the U.S. economy still has some vibrancy, which gives the Fed cover to continue its rate hike policy in May.<\/p>\n\n\n\n<\/figure>\n\n\n\n
At last glance, financial markets have priced in an 80% likelihood of that happening, and it is still not sure when the central bank would pause its monetary policy tightening. Because of this, economists are worried that an aggressive Federal Reserve will push the economy into a recession, and according to the famous investor Jeremy Grantham, the U.S. stock market could experience significant losses over the coming months. The federal funds rate is now in a range of 4.75% to 5%, which is the highest level since the 2006 year, and a recommendation is that investors should continue to take a defensive investment approach in the upcoming weeks.<\/p>\n\n\n\n
Corporate profits are emerging as the big driver of what the market is likely to do in the near term, and according to Refinitiv IBES data, S&P 500 company earnings are expected to have declined 4.8% in the first quarter compared with the same period last year. The second quarter could be an even worst story, and Steven Blitz, a chief U.S. economist at TS Lombard, said<\/a> that he expects negative growth in Q2, with recession to start by mid-year.<\/p>\n\n\n\n
When the Fed raises interest rates, the prime rate (Bank Prime Loan Rate) also jumps, leading to higher credit card and other loan rates based on individual risk profiles. Short-term borrowing will have higher rates than long-term borrowing. Meanwhile, fixed-income investors may see a negative impact on their investments.<\/p>\n\n\n\n
Cost Of Borrowing Will Increase<\/h3>\n\n\n\n
Higher interest rates also increase the cost of borrowing money, leading to a decrease in demand for goods and services. This, in turn, can cause businesses to cut back on production, potentially leading to layoffs and increased unemployment.<\/p>\n\n\n\n
Savings May Grow, But The Housing Sector May Face A Slowdown<\/h3>\n\n\n\n
However, the banking sector may benefit from higher interest rates since they can earn more money on the dollars they loan out. Money market and certificate of deposit (CD) rates may also increase, boosting savings among consumers and businesses. Higher interest rates may also cool demand in the housing sector, but they may not be as effective at reducing consumer impulse purchasing.<\/p>\n\n\n\n
All Eyes On The United States<\/h3>\n\n\n\n
Overall, the impact of interest rate changes on the economy is complex and multifaceted. While higher interest rates can help tackle inflation, they can also exacerbate a slowdown in the economy and lead to a recession. As the Fed prepares to make its decision, the financial world will closely monitor the situation to see how the US economy will be affected.<\/p>\n","post_title":"United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-enter-mild-recession-as-yet-another-hike-in-fed-rates-expected","to_ping":"","pinged":"","post_modified":"2023-05-04 13:03:34","post_modified_gmt":"2023-05-04 03:03:34","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11418","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11038,"post_author":"14","post_date":"2023-04-19 14:28:51","post_date_gmt":"2023-04-19 04:28:51","post_content":"\n
Investors continue to watch carefully comments from Federal Reserve officials that could give more insight into the path of interest rates, but it is important to say that the U.S. central bank is widely seen raising rates by 25 basis points next month. The latest economic data, including retail sales, industrial production, and consumer sentiment, cemented this expectation, and according to analysts, the U.S. economy still has some vibrancy, which gives the Fed cover to continue its rate hike policy in May.<\/p>\n\n\n\n<\/figure>\n\n\n\n
At last glance, financial markets have priced in an 80% likelihood of that happening, and it is still not sure when the central bank would pause its monetary policy tightening. Because of this, economists are worried that an aggressive Federal Reserve will push the economy into a recession, and according to the famous investor Jeremy Grantham, the U.S. stock market could experience significant losses over the coming months. The federal funds rate is now in a range of 4.75% to 5%, which is the highest level since the 2006 year, and a recommendation is that investors should continue to take a defensive investment approach in the upcoming weeks.<\/p>\n\n\n\n
Corporate profits are emerging as the big driver of what the market is likely to do in the near term, and according to Refinitiv IBES data, S&P 500 company earnings are expected to have declined 4.8% in the first quarter compared with the same period last year. The second quarter could be an even worst story, and Steven Blitz, a chief U.S. economist at TS Lombard, said<\/a> that he expects negative growth in Q2, with recession to start by mid-year.<\/p>\n\n\n\n
Central banks change interest rates for various reasons, such as to reinvigorate economic activity and growth during a slowdown or to keep inflation in check. Interest rate changes can impact many facets of the economy, including mortgage rates, home sales, consumer credit, and stock market movements.<\/p>\n\n\n\n
Impact Of Raising The Prime Rate<\/h3>\n\n\n\n
When the Fed raises interest rates, the prime rate (Bank Prime Loan Rate) also jumps, leading to higher credit card and other loan rates based on individual risk profiles. Short-term borrowing will have higher rates than long-term borrowing. Meanwhile, fixed-income investors may see a negative impact on their investments.<\/p>\n\n\n\n
Cost Of Borrowing Will Increase<\/h3>\n\n\n\n
Higher interest rates also increase the cost of borrowing money, leading to a decrease in demand for goods and services. This, in turn, can cause businesses to cut back on production, potentially leading to layoffs and increased unemployment.<\/p>\n\n\n\n
Savings May Grow, But The Housing Sector May Face A Slowdown<\/h3>\n\n\n\n
However, the banking sector may benefit from higher interest rates since they can earn more money on the dollars they loan out. Money market and certificate of deposit (CD) rates may also increase, boosting savings among consumers and businesses. Higher interest rates may also cool demand in the housing sector, but they may not be as effective at reducing consumer impulse purchasing.<\/p>\n\n\n\n
All Eyes On The United States<\/h3>\n\n\n\n
Overall, the impact of interest rate changes on the economy is complex and multifaceted. While higher interest rates can help tackle inflation, they can also exacerbate a slowdown in the economy and lead to a recession. As the Fed prepares to make its decision, the financial world will closely monitor the situation to see how the US economy will be affected.<\/p>\n","post_title":"United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-enter-mild-recession-as-yet-another-hike-in-fed-rates-expected","to_ping":"","pinged":"","post_modified":"2023-05-04 13:03:34","post_modified_gmt":"2023-05-04 03:03:34","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11418","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11038,"post_author":"14","post_date":"2023-04-19 14:28:51","post_date_gmt":"2023-04-19 04:28:51","post_content":"\n
Investors continue to watch carefully comments from Federal Reserve officials that could give more insight into the path of interest rates, but it is important to say that the U.S. central bank is widely seen raising rates by 25 basis points next month. The latest economic data, including retail sales, industrial production, and consumer sentiment, cemented this expectation, and according to analysts, the U.S. economy still has some vibrancy, which gives the Fed cover to continue its rate hike policy in May.<\/p>\n\n\n\n<\/figure>\n\n\n\n
At last glance, financial markets have priced in an 80% likelihood of that happening, and it is still not sure when the central bank would pause its monetary policy tightening. Because of this, economists are worried that an aggressive Federal Reserve will push the economy into a recession, and according to the famous investor Jeremy Grantham, the U.S. stock market could experience significant losses over the coming months. The federal funds rate is now in a range of 4.75% to 5%, which is the highest level since the 2006 year, and a recommendation is that investors should continue to take a defensive investment approach in the upcoming weeks.<\/p>\n\n\n\n
Corporate profits are emerging as the big driver of what the market is likely to do in the near term, and according to Refinitiv IBES data, S&P 500 company earnings are expected to have declined 4.8% in the first quarter compared with the same period last year. The second quarter could be an even worst story, and Steven Blitz, a chief U.S. economist at TS Lombard, said<\/a> that he expects negative growth in Q2, with recession to start by mid-year.<\/p>\n\n\n\n
Why Do Central Banks Change Interest Rates?<\/h3>\n\n\n\n
Central banks change interest rates for various reasons, such as to reinvigorate economic activity and growth during a slowdown or to keep inflation in check. Interest rate changes can impact many facets of the economy, including mortgage rates, home sales, consumer credit, and stock market movements.<\/p>\n\n\n\n
Impact Of Raising The Prime Rate<\/h3>\n\n\n\n
When the Fed raises interest rates, the prime rate (Bank Prime Loan Rate) also jumps, leading to higher credit card and other loan rates based on individual risk profiles. Short-term borrowing will have higher rates than long-term borrowing. Meanwhile, fixed-income investors may see a negative impact on their investments.<\/p>\n\n\n\n
Cost Of Borrowing Will Increase<\/h3>\n\n\n\n
Higher interest rates also increase the cost of borrowing money, leading to a decrease in demand for goods and services. This, in turn, can cause businesses to cut back on production, potentially leading to layoffs and increased unemployment.<\/p>\n\n\n\n
Savings May Grow, But The Housing Sector May Face A Slowdown<\/h3>\n\n\n\n
However, the banking sector may benefit from higher interest rates since they can earn more money on the dollars they loan out. Money market and certificate of deposit (CD) rates may also increase, boosting savings among consumers and businesses. Higher interest rates may also cool demand in the housing sector, but they may not be as effective at reducing consumer impulse purchasing.<\/p>\n\n\n\n
All Eyes On The United States<\/h3>\n\n\n\n
Overall, the impact of interest rate changes on the economy is complex and multifaceted. While higher interest rates can help tackle inflation, they can also exacerbate a slowdown in the economy and lead to a recession. As the Fed prepares to make its decision, the financial world will closely monitor the situation to see how the US economy will be affected.<\/p>\n","post_title":"United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-enter-mild-recession-as-yet-another-hike-in-fed-rates-expected","to_ping":"","pinged":"","post_modified":"2023-05-04 13:03:34","post_modified_gmt":"2023-05-04 03:03:34","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11418","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11038,"post_author":"14","post_date":"2023-04-19 14:28:51","post_date_gmt":"2023-04-19 04:28:51","post_content":"\n
Investors continue to watch carefully comments from Federal Reserve officials that could give more insight into the path of interest rates, but it is important to say that the U.S. central bank is widely seen raising rates by 25 basis points next month. The latest economic data, including retail sales, industrial production, and consumer sentiment, cemented this expectation, and according to analysts, the U.S. economy still has some vibrancy, which gives the Fed cover to continue its rate hike policy in May.<\/p>\n\n\n\n<\/figure>\n\n\n\n
At last glance, financial markets have priced in an 80% likelihood of that happening, and it is still not sure when the central bank would pause its monetary policy tightening. Because of this, economists are worried that an aggressive Federal Reserve will push the economy into a recession, and according to the famous investor Jeremy Grantham, the U.S. stock market could experience significant losses over the coming months. The federal funds rate is now in a range of 4.75% to 5%, which is the highest level since the 2006 year, and a recommendation is that investors should continue to take a defensive investment approach in the upcoming weeks.<\/p>\n\n\n\n
Corporate profits are emerging as the big driver of what the market is likely to do in the near term, and according to Refinitiv IBES data, S&P 500 company earnings are expected to have declined 4.8% in the first quarter compared with the same period last year. The second quarter could be an even worst story, and Steven Blitz, a chief U.S. economist at TS Lombard, said<\/a> that he expects negative growth in Q2, with recession to start by mid-year.<\/p>\n\n\n\n
Why Do Central Banks Change Interest Rates?<\/h3>\n\n\n\n
Central banks change interest rates for various reasons, such as to reinvigorate economic activity and growth during a slowdown or to keep inflation in check. Interest rate changes can impact many facets of the economy, including mortgage rates, home sales, consumer credit, and stock market movements.<\/p>\n\n\n\n
Impact Of Raising The Prime Rate<\/h3>\n\n\n\n
When the Fed raises interest rates, the prime rate (Bank Prime Loan Rate) also jumps, leading to higher credit card and other loan rates based on individual risk profiles. Short-term borrowing will have higher rates than long-term borrowing. Meanwhile, fixed-income investors may see a negative impact on their investments.<\/p>\n\n\n\n
Cost Of Borrowing Will Increase<\/h3>\n\n\n\n
Higher interest rates also increase the cost of borrowing money, leading to a decrease in demand for goods and services. This, in turn, can cause businesses to cut back on production, potentially leading to layoffs and increased unemployment.<\/p>\n\n\n\n
Savings May Grow, But The Housing Sector May Face A Slowdown<\/h3>\n\n\n\n
However, the banking sector may benefit from higher interest rates since they can earn more money on the dollars they loan out. Money market and certificate of deposit (CD) rates may also increase, boosting savings among consumers and businesses. Higher interest rates may also cool demand in the housing sector, but they may not be as effective at reducing consumer impulse purchasing.<\/p>\n\n\n\n
All Eyes On The United States<\/h3>\n\n\n\n
Overall, the impact of interest rate changes on the economy is complex and multifaceted. While higher interest rates can help tackle inflation, they can also exacerbate a slowdown in the economy and lead to a recession. As the Fed prepares to make its decision, the financial world will closely monitor the situation to see how the US economy will be affected.<\/p>\n","post_title":"United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-enter-mild-recession-as-yet-another-hike-in-fed-rates-expected","to_ping":"","pinged":"","post_modified":"2023-05-04 13:03:34","post_modified_gmt":"2023-05-04 03:03:34","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11418","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11038,"post_author":"14","post_date":"2023-04-19 14:28:51","post_date_gmt":"2023-04-19 04:28:51","post_content":"\n
Investors continue to watch carefully comments from Federal Reserve officials that could give more insight into the path of interest rates, but it is important to say that the U.S. central bank is widely seen raising rates by 25 basis points next month. The latest economic data, including retail sales, industrial production, and consumer sentiment, cemented this expectation, and according to analysts, the U.S. economy still has some vibrancy, which gives the Fed cover to continue its rate hike policy in May.<\/p>\n\n\n\n<\/figure>\n\n\n\n
At last glance, financial markets have priced in an 80% likelihood of that happening, and it is still not sure when the central bank would pause its monetary policy tightening. Because of this, economists are worried that an aggressive Federal Reserve will push the economy into a recession, and according to the famous investor Jeremy Grantham, the U.S. stock market could experience significant losses over the coming months. The federal funds rate is now in a range of 4.75% to 5%, which is the highest level since the 2006 year, and a recommendation is that investors should continue to take a defensive investment approach in the upcoming weeks.<\/p>\n\n\n\n
Corporate profits are emerging as the big driver of what the market is likely to do in the near term, and according to Refinitiv IBES data, S&P 500 company earnings are expected to have declined 4.8% in the first quarter compared with the same period last year. The second quarter could be an even worst story, and Steven Blitz, a chief U.S. economist at TS Lombard, said<\/a> that he expects negative growth in Q2, with recession to start by mid-year.<\/p>\n\n\n\n
Recent US economic data suggests a slowing economy, with predictions of a recession later this year. For example, economic output slowed to an annual rate of 1.1 percent in Q1 2023, while the Fed's favoured measure of inflation fell to an annual rate of 4.2 percent in March, down from 5.1 percent the previous month.<\/p>\n\n\n\n<\/figure>\n\n\n\n
Why Do Central Banks Change Interest Rates?<\/h3>\n\n\n\n
Central banks change interest rates for various reasons, such as to reinvigorate economic activity and growth during a slowdown or to keep inflation in check. Interest rate changes can impact many facets of the economy, including mortgage rates, home sales, consumer credit, and stock market movements.<\/p>\n\n\n\n
Impact Of Raising The Prime Rate<\/h3>\n\n\n\n
When the Fed raises interest rates, the prime rate (Bank Prime Loan Rate) also jumps, leading to higher credit card and other loan rates based on individual risk profiles. Short-term borrowing will have higher rates than long-term borrowing. Meanwhile, fixed-income investors may see a negative impact on their investments.<\/p>\n\n\n\n
Cost Of Borrowing Will Increase<\/h3>\n\n\n\n
Higher interest rates also increase the cost of borrowing money, leading to a decrease in demand for goods and services. This, in turn, can cause businesses to cut back on production, potentially leading to layoffs and increased unemployment.<\/p>\n\n\n\n
Savings May Grow, But The Housing Sector May Face A Slowdown<\/h3>\n\n\n\n
However, the banking sector may benefit from higher interest rates since they can earn more money on the dollars they loan out. Money market and certificate of deposit (CD) rates may also increase, boosting savings among consumers and businesses. Higher interest rates may also cool demand in the housing sector, but they may not be as effective at reducing consumer impulse purchasing.<\/p>\n\n\n\n
All Eyes On The United States<\/h3>\n\n\n\n
Overall, the impact of interest rate changes on the economy is complex and multifaceted. While higher interest rates can help tackle inflation, they can also exacerbate a slowdown in the economy and lead to a recession. As the Fed prepares to make its decision, the financial world will closely monitor the situation to see how the US economy will be affected.<\/p>\n","post_title":"United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-enter-mild-recession-as-yet-another-hike-in-fed-rates-expected","to_ping":"","pinged":"","post_modified":"2023-05-04 13:03:34","post_modified_gmt":"2023-05-04 03:03:34","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11418","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11038,"post_author":"14","post_date":"2023-04-19 14:28:51","post_date_gmt":"2023-04-19 04:28:51","post_content":"\n
Investors continue to watch carefully comments from Federal Reserve officials that could give more insight into the path of interest rates, but it is important to say that the U.S. central bank is widely seen raising rates by 25 basis points next month. The latest economic data, including retail sales, industrial production, and consumer sentiment, cemented this expectation, and according to analysts, the U.S. economy still has some vibrancy, which gives the Fed cover to continue its rate hike policy in May.<\/p>\n\n\n\n<\/figure>\n\n\n\n
At last glance, financial markets have priced in an 80% likelihood of that happening, and it is still not sure when the central bank would pause its monetary policy tightening. Because of this, economists are worried that an aggressive Federal Reserve will push the economy into a recession, and according to the famous investor Jeremy Grantham, the U.S. stock market could experience significant losses over the coming months. The federal funds rate is now in a range of 4.75% to 5%, which is the highest level since the 2006 year, and a recommendation is that investors should continue to take a defensive investment approach in the upcoming weeks.<\/p>\n\n\n\n
Corporate profits are emerging as the big driver of what the market is likely to do in the near term, and according to Refinitiv IBES data, S&P 500 company earnings are expected to have declined 4.8% in the first quarter compared with the same period last year. The second quarter could be an even worst story, and Steven Blitz, a chief U.S. economist at TS Lombard, said<\/a> that he expects negative growth in Q2, with recession to start by mid-year.<\/p>\n\n\n\n
Despite the growing economic slowdown, the Fed is expected to raise interest rates by 25 basis points, marking its tenth-rate hike in a row. This move would bring the benchmark to between 5 and 5.25 percent, its highest level since 2007.<\/p>\n\n\n\n
Recent US economic data suggests a slowing economy, with predictions of a recession later this year. For example, economic output slowed to an annual rate of 1.1 percent in Q1 2023, while the Fed's favoured measure of inflation fell to an annual rate of 4.2 percent in March, down from 5.1 percent the previous month.<\/p>\n\n\n\n<\/figure>\n\n\n\n
Why Do Central Banks Change Interest Rates?<\/h3>\n\n\n\n
Central banks change interest rates for various reasons, such as to reinvigorate economic activity and growth during a slowdown or to keep inflation in check. Interest rate changes can impact many facets of the economy, including mortgage rates, home sales, consumer credit, and stock market movements.<\/p>\n\n\n\n
Impact Of Raising The Prime Rate<\/h3>\n\n\n\n
When the Fed raises interest rates, the prime rate (Bank Prime Loan Rate) also jumps, leading to higher credit card and other loan rates based on individual risk profiles. Short-term borrowing will have higher rates than long-term borrowing. Meanwhile, fixed-income investors may see a negative impact on their investments.<\/p>\n\n\n\n
Cost Of Borrowing Will Increase<\/h3>\n\n\n\n
Higher interest rates also increase the cost of borrowing money, leading to a decrease in demand for goods and services. This, in turn, can cause businesses to cut back on production, potentially leading to layoffs and increased unemployment.<\/p>\n\n\n\n
Savings May Grow, But The Housing Sector May Face A Slowdown<\/h3>\n\n\n\n
However, the banking sector may benefit from higher interest rates since they can earn more money on the dollars they loan out. Money market and certificate of deposit (CD) rates may also increase, boosting savings among consumers and businesses. Higher interest rates may also cool demand in the housing sector, but they may not be as effective at reducing consumer impulse purchasing.<\/p>\n\n\n\n
All Eyes On The United States<\/h3>\n\n\n\n
Overall, the impact of interest rate changes on the economy is complex and multifaceted. While higher interest rates can help tackle inflation, they can also exacerbate a slowdown in the economy and lead to a recession. As the Fed prepares to make its decision, the financial world will closely monitor the situation to see how the US economy will be affected.<\/p>\n","post_title":"United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-enter-mild-recession-as-yet-another-hike-in-fed-rates-expected","to_ping":"","pinged":"","post_modified":"2023-05-04 13:03:34","post_modified_gmt":"2023-05-04 03:03:34","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11418","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11038,"post_author":"14","post_date":"2023-04-19 14:28:51","post_date_gmt":"2023-04-19 04:28:51","post_content":"\n
Investors continue to watch carefully comments from Federal Reserve officials that could give more insight into the path of interest rates, but it is important to say that the U.S. central bank is widely seen raising rates by 25 basis points next month. The latest economic data, including retail sales, industrial production, and consumer sentiment, cemented this expectation, and according to analysts, the U.S. economy still has some vibrancy, which gives the Fed cover to continue its rate hike policy in May.<\/p>\n\n\n\n<\/figure>\n\n\n\n
At last glance, financial markets have priced in an 80% likelihood of that happening, and it is still not sure when the central bank would pause its monetary policy tightening. Because of this, economists are worried that an aggressive Federal Reserve will push the economy into a recession, and according to the famous investor Jeremy Grantham, the U.S. stock market could experience significant losses over the coming months. The federal funds rate is now in a range of 4.75% to 5%, which is the highest level since the 2006 year, and a recommendation is that investors should continue to take a defensive investment approach in the upcoming weeks.<\/p>\n\n\n\n
Corporate profits are emerging as the big driver of what the market is likely to do in the near term, and according to Refinitiv IBES data, S&P 500 company earnings are expected to have declined 4.8% in the first quarter compared with the same period last year. The second quarter could be an even worst story, and Steven Blitz, a chief U.S. economist at TS Lombard, said<\/a> that he expects negative growth in Q2, with recession to start by mid-year.<\/p>\n\n\n\n
Financial markets worldwide are abuzz with talk of the US Federal Reserve's (Fed) upcoming decision to raise its benchmark lending rate to tackle high inflation. However, many economists are concerned that this move could exacerbate the slowdown in the American economy, potentially leading to a mild recession later this year.<\/p>\n\n\n\n
Despite the growing economic slowdown, the Fed is expected to raise interest rates by 25 basis points, marking its tenth-rate hike in a row. This move would bring the benchmark to between 5 and 5.25 percent, its highest level since 2007.<\/p>\n\n\n\n
Recent US economic data suggests a slowing economy, with predictions of a recession later this year. For example, economic output slowed to an annual rate of 1.1 percent in Q1 2023, while the Fed's favoured measure of inflation fell to an annual rate of 4.2 percent in March, down from 5.1 percent the previous month.<\/p>\n\n\n\n<\/figure>\n\n\n\n
Why Do Central Banks Change Interest Rates?<\/h3>\n\n\n\n
Central banks change interest rates for various reasons, such as to reinvigorate economic activity and growth during a slowdown or to keep inflation in check. Interest rate changes can impact many facets of the economy, including mortgage rates, home sales, consumer credit, and stock market movements.<\/p>\n\n\n\n
Impact Of Raising The Prime Rate<\/h3>\n\n\n\n
When the Fed raises interest rates, the prime rate (Bank Prime Loan Rate) also jumps, leading to higher credit card and other loan rates based on individual risk profiles. Short-term borrowing will have higher rates than long-term borrowing. Meanwhile, fixed-income investors may see a negative impact on their investments.<\/p>\n\n\n\n
Cost Of Borrowing Will Increase<\/h3>\n\n\n\n
Higher interest rates also increase the cost of borrowing money, leading to a decrease in demand for goods and services. This, in turn, can cause businesses to cut back on production, potentially leading to layoffs and increased unemployment.<\/p>\n\n\n\n
Savings May Grow, But The Housing Sector May Face A Slowdown<\/h3>\n\n\n\n
However, the banking sector may benefit from higher interest rates since they can earn more money on the dollars they loan out. Money market and certificate of deposit (CD) rates may also increase, boosting savings among consumers and businesses. Higher interest rates may also cool demand in the housing sector, but they may not be as effective at reducing consumer impulse purchasing.<\/p>\n\n\n\n
All Eyes On The United States<\/h3>\n\n\n\n
Overall, the impact of interest rate changes on the economy is complex and multifaceted. While higher interest rates can help tackle inflation, they can also exacerbate a slowdown in the economy and lead to a recession. As the Fed prepares to make its decision, the financial world will closely monitor the situation to see how the US economy will be affected.<\/p>\n","post_title":"United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-enter-mild-recession-as-yet-another-hike-in-fed-rates-expected","to_ping":"","pinged":"","post_modified":"2023-05-04 13:03:34","post_modified_gmt":"2023-05-04 03:03:34","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11418","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11038,"post_author":"14","post_date":"2023-04-19 14:28:51","post_date_gmt":"2023-04-19 04:28:51","post_content":"\n
Investors continue to watch carefully comments from Federal Reserve officials that could give more insight into the path of interest rates, but it is important to say that the U.S. central bank is widely seen raising rates by 25 basis points next month. The latest economic data, including retail sales, industrial production, and consumer sentiment, cemented this expectation, and according to analysts, the U.S. economy still has some vibrancy, which gives the Fed cover to continue its rate hike policy in May.<\/p>\n\n\n\n<\/figure>\n\n\n\n
At last glance, financial markets have priced in an 80% likelihood of that happening, and it is still not sure when the central bank would pause its monetary policy tightening. Because of this, economists are worried that an aggressive Federal Reserve will push the economy into a recession, and according to the famous investor Jeremy Grantham, the U.S. stock market could experience significant losses over the coming months. The federal funds rate is now in a range of 4.75% to 5%, which is the highest level since the 2006 year, and a recommendation is that investors should continue to take a defensive investment approach in the upcoming weeks.<\/p>\n\n\n\n
Corporate profits are emerging as the big driver of what the market is likely to do in the near term, and according to Refinitiv IBES data, S&P 500 company earnings are expected to have declined 4.8% in the first quarter compared with the same period last year. The second quarter could be an even worst story, and Steven Blitz, a chief U.S. economist at TS Lombard, said<\/a> that he expects negative growth in Q2, with recession to start by mid-year.<\/p>\n\n\n\n
The impact of rate changes is complex, potentially cooling housing demand but boosting savings.<\/li>\n<\/ul>\n\n\n\n
Financial markets worldwide are abuzz with talk of the US Federal Reserve's (Fed) upcoming decision to raise its benchmark lending rate to tackle high inflation. However, many economists are concerned that this move could exacerbate the slowdown in the American economy, potentially leading to a mild recession later this year.<\/p>\n\n\n\n
Despite the growing economic slowdown, the Fed is expected to raise interest rates by 25 basis points, marking its tenth-rate hike in a row. This move would bring the benchmark to between 5 and 5.25 percent, its highest level since 2007.<\/p>\n\n\n\n
Recent US economic data suggests a slowing economy, with predictions of a recession later this year. For example, economic output slowed to an annual rate of 1.1 percent in Q1 2023, while the Fed's favoured measure of inflation fell to an annual rate of 4.2 percent in March, down from 5.1 percent the previous month.<\/p>\n\n\n\n<\/figure>\n\n\n\n
Why Do Central Banks Change Interest Rates?<\/h3>\n\n\n\n
Central banks change interest rates for various reasons, such as to reinvigorate economic activity and growth during a slowdown or to keep inflation in check. Interest rate changes can impact many facets of the economy, including mortgage rates, home sales, consumer credit, and stock market movements.<\/p>\n\n\n\n
Impact Of Raising The Prime Rate<\/h3>\n\n\n\n
When the Fed raises interest rates, the prime rate (Bank Prime Loan Rate) also jumps, leading to higher credit card and other loan rates based on individual risk profiles. Short-term borrowing will have higher rates than long-term borrowing. Meanwhile, fixed-income investors may see a negative impact on their investments.<\/p>\n\n\n\n
Cost Of Borrowing Will Increase<\/h3>\n\n\n\n
Higher interest rates also increase the cost of borrowing money, leading to a decrease in demand for goods and services. This, in turn, can cause businesses to cut back on production, potentially leading to layoffs and increased unemployment.<\/p>\n\n\n\n
Savings May Grow, But The Housing Sector May Face A Slowdown<\/h3>\n\n\n\n
However, the banking sector may benefit from higher interest rates since they can earn more money on the dollars they loan out. Money market and certificate of deposit (CD) rates may also increase, boosting savings among consumers and businesses. Higher interest rates may also cool demand in the housing sector, but they may not be as effective at reducing consumer impulse purchasing.<\/p>\n\n\n\n
All Eyes On The United States<\/h3>\n\n\n\n
Overall, the impact of interest rate changes on the economy is complex and multifaceted. While higher interest rates can help tackle inflation, they can also exacerbate a slowdown in the economy and lead to a recession. As the Fed prepares to make its decision, the financial world will closely monitor the situation to see how the US economy will be affected.<\/p>\n","post_title":"United States May Enter Mild Recession As Yet Another Hike In Fed Rates Expected","post_excerpt":"","post_status":"publish","comment_status":"closed","ping_status":"closed","post_password":"","post_name":"united-states-may-enter-mild-recession-as-yet-another-hike-in-fed-rates-expected","to_ping":"","pinged":"","post_modified":"2023-05-04 13:03:34","post_modified_gmt":"2023-05-04 03:03:34","post_content_filtered":"","post_parent":0,"guid":"https:\/\/www.thedistributed.co\/?p=11418","menu_order":0,"post_type":"post","post_mime_type":"","comment_count":"0","filter":"raw"},{"ID":11038,"post_author":"14","post_date":"2023-04-19 14:28:51","post_date_gmt":"2023-04-19 04:28:51","post_content":"\n
Investors continue to watch carefully comments from Federal Reserve officials that could give more insight into the path of interest rates, but it is important to say that the U.S. central bank is widely seen raising rates by 25 basis points next month. The latest economic data, including retail sales, industrial production, and consumer sentiment, cemented this expectation, and according to analysts, the U.S. economy still has some vibrancy, which gives the Fed cover to continue its rate hike policy in May.<\/p>\n\n\n\n<\/figure>\n\n\n\n
At last glance, financial markets have priced in an 80% likelihood of that happening, and it is still not sure when the central bank would pause its monetary policy tightening. Because of this, economists are worried that an aggressive Federal Reserve will push the economy into a recession, and according to the famous investor Jeremy Grantham, the U.S. stock market could experience significant losses over the coming months. The federal funds rate is now in a range of 4.75% to 5%, which is the highest level since the 2006 year, and a recommendation is that investors should continue to take a defensive investment approach in the upcoming weeks.<\/p>\n\n\n\n
Corporate profits are emerging as the big driver of what the market is likely to do in the near term, and according to Refinitiv IBES data, S&P 500 company earnings are expected to have declined 4.8% in the first quarter compared with the same period last year. The second quarter could be an even worst story, and Steven Blitz, a chief U.S. economist at TS Lombard, said<\/a> that he expects negative growth in Q2, with recession to start by mid-year.<\/p>\n\n\n\n
![\"\"](\"https:\/\/www.thedistributed.co\/wp-content\/uploads\/2023\/04\/FED-rate-hike.jpg\")
<\/figure>\n\n\n\n![\"\"](\"https:\/\/www.thedistributed.co\/wp-content\/uploads\/2023\/05\/US-interest-rates-data-1160x540.png\")
<\/figure>\n\n\n\n