Get Ready for Higher Prices: US Interest Rates to Rise in 2023
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Goldman Sachs and Bank of America have reviewed their predictions for US interest rates and believe that the Federal Reserve will raise rates three times this year due to the re-emergence of inflation and a strengthening labor market.
Although higher interest rates can help control inflation, they also make borrowing more expensive. This means that businesses and consumers may not be able to afford purchases beyond their means, reducing demand for those goods.
One area that will be particularly affected by changes in interest rates is the housing market, as people are more likely to buy a house on loan.
Individuals and businesses will need to adjust their borrowing plans and strategies. For example, funding for business expansion or home purchases may need to come from other sources or require additional work hours to earn the required funds.
Goldman Sachs and Bank of America economists predict a 25-point increase by June, which would bring interest rates to around 5.25% to 5.5%.
The European Investment Bank USB expects a rate hike by March and May, but they also predict a reduction in rates by September. Each economist has a different view on how things will unfold. Those at J.P. Morgan predict a high of 5.1% by the end of June, while those surveyed by Reuters believe that the Fed will double its current rates in the coming months with no relief within the year.
Although some complain about having to work at different businesses online, many are saving up money to gain new skills to move up the capitalist ladder.
The worst outcome of reduced borrowing may be a slowing economy, but some may see it as a necessary step to control inflation. What do you think about all this? Share your thoughts in the comment section below.
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I think if the inflation increases then more people will get strapped for cash forcing them to liquidate their assets. Since high interest rates means no borrowing for the average Joe.
I wonder what the data is on the average person's investments in the US. It would be interesting to know
Indeed. I think not many people are saving these days because they can't afford to do so.
Yeah...I hope times get better