With the Fed meeting this week to raise rates again, the speculation is what happens after. Are we getting closer to the end of the Fed rate hike cycle? At that point it will be all about the economic data.
I don’t see the Fed changing their tune on rate cuts until the labor market breaks. I believe they will use the strength of household balance sheets to justify hikes because they think rates need to stay higher for longer. However, with all the rate hikes in the system now, once Americans start losing their jobs, the Fed’s tone will change.
It will be hard for them to justify high rates when Americans lose their jobs, no matter how good the consumer looks on paper. Now that all six of my
The Federal Reserve will hold another meeting this week, where everyone assumes we will get another 75 bps rate hike. The question is: how many more rate hikes are left? And, once they’re done hiking rates, will the Fed need to keep rates high because the consumer balance sheet looks so good?
Over the weekend, The Wall Street Journal brought up this point — that the Fed is mindful that household balance sheets are much better now due to the excess savings built up during the COVID recovery and they might need to raise rates again or keep them details ⇒
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