Federal Reserve pauses rate hikes as inflation slows down
NBCAPR 2 2023
Signals of a potential soft landing by the Fed are becoming ever clearer, and a cooling labor market is a positive sign that the US economy is moving in the right direction. However, with inflation still nowhere near the desired 2% mark and multiple potential hiccups looming, there's more to do before consumers can finally breathe a sigh of relief, which is why the Fed is right to stay its course.
By doubling down on high interest rates for longer, the Fed is risking a financial crisis and economic recession in 2024. With approximately $24.5B of the $1.5T loan market already defaulting – with 2023 expected to be the third worst defaulting year in US history – it is hard to see how a further collapse will be avoided and debts repaid in the current economic environment.