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With economic forecasters rewriting their 2024 outlooks following recent moves from the Federal Reserve, financial economists D. Brian Blank and Brandy Hadley share their thoughts on the upcoming year.
“While the U.S. economy has certainly avoided a downturn for longer than many expected, the inflation battle is a long way from finished,” D. Brian Blank writes.
“The mortgage dates back to medieval England. But the roots of these legal contracts go back thousands of years,” Michael J. Highfield writes.
Signs of distress could snowball into financial crisis, compounding the Fed’s woes as it struggles to contain inflation, D. Brian Bank writes.
“The U.S. Federal Reserve holds inordinate sway over the world’s economies,” MSU Finance Professor D. Brian Blank writes. “Its power is primarily because of the dominance of the U.S. dollar, which soared in recent months as the Fed’s aggressive interest rate hikes made the greenback more attractive to investors. But this has a downside for other countries because it is fueling inflation, raising the cost of borrowing and increasing the risk of a global recession.”
The Federal Reserve lifted interest rates by 0.75 percentage point on June 15, 2022, the third hike this year and the largest since 1994. The move is aimed at countering the fastest pace of inflation in over 40 years. What does this all mean? Finance scholar Brian Blank explains what the Fed is trying to do, whether it can succeed and what it means for you.
“On March 16, 2022, the Federal Reserve raised its target interest rate by a quarter point, the first of many increases the U.S. central bank is expected to make over the coming months,” Jeffery S. Bredthauer writes. “The aim is to tamp down inflation that has been running at a year-over-year pace of 7.9%. The challenge is to do this without sending the economy into recession. Some economists and observers are already raising the specter of stagflation, which means high inflation coupled with a stagnating economy.”
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