What Might Be Next In The Economy?

Since we don’t have a crystal ball, it is impossible to accurately predict the future! This is especially true when it comes to economic issues, including investment, real estate, interest rates, inflationary pressures, government actions, international factors and more. What are the consequences of inflation, recession, interest rates, Fed decisions, etc.? How does one hedge – his – bet to minimize unnecessary risk while achieving high-quality returns? There is no simple answer, because there are so many factors that influence a lot. With this in mind, this article will attempt to briefly consider, examine, and review possible factors to help readers gain a fuller understanding of these possibilities.

1) Interest Rates: We have experienced a long period of historically low interest rates. This provides easy money because the borrowing costs are so low. Both individuals and businesses benefit, at least in the short term, as home buyers can buy more homes due to their low monthly rent due to low mortgage rates. Corporate and government bonds and banks have low yields. In recent memory, it has stopped inflation and made house prices rise, which we have not seen. The Fed has said it will end this support and also raise interest rates in 2022, possibly three times. What do you think this will lead to.

2) Auto Loans, Consumer Loans, Lending: The auto industry is significantly affected by supply chain challenges. Car loans and leases will cost more as interest rates rise.

3) This model started with tax reform legislation passed in late 2017 that created an initial, new trillion dollar deficit

4) Government spending due to financial difficulties and challenges due to the pandemic, closures, etc. has added trillions of dollars to the debt. Unfortunately, the debt must eventually be resolved.

5) Perceptions and Attitudes: In recent years there has clearly been a public perception, coupled with many fears, that have had a serious impact on the economy.

Either we start planning effectively, and with common sense and an open mind, many will be put at risk. Wake up, America, to better leadership, service and representation.

 

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