The Fed controls the interest rates here in the U.S. in such a way to avoid recessions and depressions.
In fact, our economy has fared better than any other since Covid Trashed the whole Global Economy (Global Climate changes didn't help either).
But, it was always a risk to keep interest rates this high for so long and now the chickens may have come home to roost so to speak. So, will the Fed begin to reduce interest rates in order to stimulate economic growth? That's a question no one can really answer now which is why the Stock markets are presently dropping.
And because the American Economy right now is the single best economic engine on earth the way it has been working, any change in the U.S. economy like this affects everyone on earth through a ripple effect too. These kinds of changes often mean people in the U.S. stop buying products and start to save their money again instead.
When people stop buying products as fast as they have been this also creates a ripple effect worldwide too starting with job losses or at least people stopping hiring people until things get better which is happening right now.
What will happen?
No one really knows which is why there is presently a selloff worldwide.
However, all this could change on a dime if the Fed reduces interest rates by say 1/2 a percent in a few days or weeks too.
There are many factors nationally and worldwide in play here including things like Iran attacking Israel with a concerted attack from Iran, Hezbollah and Houthis all at once and overwhelming the iron dome with mass casualties all over Israel too. This is also a potential factor in all of this somehow too.
Needless to say people are scared right now of Netanyahu's craziness that he may have just started a nuclear war with Iran by assassinating two key figures in Lebanon and Iran. This is also a big factor here of the nukes coming out worldwide over this too sort of like the way World war I started and what a mess that was. (the way it started with an assassination).
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