There’s not a day that passes lately that my inbox isn’t full-up with news of CEOs, banks, and investors predicting a major global recession. Related: The Biden Economy Keeps Getting Worse Real estate is a large enough sector that its floundering will have repercussions in other areas. In addition, the COVID-inspired changes in work habits have left a whole lot of office space vacant, leading the commercial market to sag as well. The bad news is that people’s net worth will be dropping as their equity devalues, and anyone who was planning to sell or rent out a property is looking at a 5% – 10% decrease from last year’s prices. The good news is that this won’t harm anyone who has already completed any large purchases they needed to make. One of the immediate effects the new, higher rates have is to drop the value of real estate and other high-ticket property that is generally purchased with a loan. I do hope you weren’t carrying any revolving debt.
#Buckle up buttercup full#
The June hike will be announced Wednesday afternoon, and it’s widely expected to be a whopping 0.75%, with some even floating a nightmare scenario in which the Fed cranks it up a full point. So far this year, we’ve had a 0.25% hike in March and a 0.5% increase in May. Oh, and the independent factors making fuel super-expensive aren’t going to be fixed so long as Democrats control anything, which means everything else will still cost more to produce and deliver.Īs already discussed, the Fed will keep cranking up interest rates for the foreseeable future, in order to get inflation back under control. And someday, when inflation is beaten back to two or 3%, the new baseline cost of food and fuel will be here to stay. The Fed is going to have to suck a lot more air out of this balloon to bring it down. The Federal Reserve has begun the painful process of jacking up interest rates to tighten things up, but the first two installments don’t seem to have had any effect in slowing down the worst inflation since 1980. And that currency flood doesn’t just dry up overnight. When the government dumps an extra 20% of the GDP into the economy, no one should be surprised that dollars don’t buy as much. Put it all together, and here are some of the sorry conditions likely headed our way: I also read what the actual experts have to say. I should point out that I’m not any sort of a credentialed expert, just someone who pays attention, knows a little history, and has been around long enough to pick up on a couple patterns.
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