This shows that we are still fighting inflation and by raising interest rates, less individuals and businesses would take out loans thus slowing down the circulation of money. Slowing down the circulation of money is a tactic the Federal Gov. uses to cool off the economy which they have done a great job with because our economy is almost ruined.
What else could this mean?
This could also mean that the rates won't increase again for a while.
With interest rates increasing we are not starting to see the effects of high interest rates in the economy. Not to mention, the couple bank failure we've had in the past couple months are also an outcome due to high rates. Yes, the whole goal is to cut inflation down, but with our debt ceiling approaching the gov is just going to print more money increasing inflation even more. So what does this mean? Well this means the economy is feeling the pressure, homeowners who have 3% interest rates are no longer looking to sell and back from covid 19 buyers who were getting loans are now starting to default on their loans due to high interest rates which means forbearance. JP spoke today and stated that depending how reports come out within the next months... it will determine if we will have cuts or not. I think right now is the best time to buy Index Funds like SPY and QQQ. Once we see cuts, the stock market will more than likely rally to recover.
I think that the fed keeps raising their rates for some other reasons other than what they're telling us. However I could tell you right now as a business owner I could get a business loan for about four or five percent which made it totally make sense to get a loan. But now it's like 10%, it's brutal High for a business. Which doesn't even make sense to take the loan out. There are tons of banks now approaching me trying to basically sell me loans because now tons of other people are not wanting loans so I think with the Third Bank that just failed there is going to be a lot more issues than many people think.
We are unfortunately going to be hit hard with a lot of economic problems.
But there is a great chance for opportunity in any market.
I might become a hard money lender actually LOL it would be cheaper than the FED rates at this point LOL.