Back in April, we discussed how inflation has been increasing over the past year. And how it all began after restrictions from COVID lockdowns began to loosen and in turn, American consumers are spending more freely. Indeed, we saw the largest wave of inflation rise from pent-up consumer demand, combined with trillions in stimulus spending that put investors on edge. Moreover, we saw an impending market correction along with all of the COVID variants. On top of it all, we began to see (in 2022) the Fed’s reaction, a rise in interest rates. Over the past few months, the Feds have raised rates, each in parts separated by a few weeks or months. This time, rates are rising once more.
Right now, Markets are anticipating even more rapid rates of interest rate hikes; The Feds aren’t far behind the market here and are contemplating the possibility as well. Indeed, Central bank policymakers are looking at the possibility of raising rates by 75 basis points or three-fourths of a percent. A change in this fund rate changes what banks charge each other for overnight financing. What do you think about the prospect of another rate hike? And will it be anything different? Or just one more step along the same dreary path?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.