{"id":1125,"date":"2023-02-17T07:16:53","date_gmt":"2023-02-17T12:16:53","guid":{"rendered":"https:\/\/embarrdowns.com\/navigating-the-economy-how-the-federal-reserve-is-fighting-inflation-and-avoiding-recession\/"},"modified":"2023-02-17T07:16:53","modified_gmt":"2023-02-17T12:16:53","slug":"navigating-the-economy-how-the-federal-reserve-is-fighting-inflation-and-avoiding-recession","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/navigating-the-economy-how-the-federal-reserve-is-fighting-inflation-and-avoiding-recession\/","title":{"rendered":"Navigating the Economy: How the Federal Reserve is Fighting Inflation and Avoiding Recession"},"content":{"rendered":"

The Federal Reserve’s attempts to combat inflation and keep it within its target of 2%\u20133% has led to seven successive rate increases in the past year.[0]<\/a><\/sup> While effective, these hikes have prompted fears amongst economists of a potential recession, as the Fed risks pushing the economy too far, leading to job losses.<\/p>\n

Retail sales rose 3% in January, according to the Commerce Department, and the unemployment rate is at its lowest since May 1969.[1]<\/a><\/sup> Yet the decline in the Philly Fed index and the poor momentum in the US housing market have sparked recession fears amongst investors.[2]<\/a><\/sup> The higher-than-expected Producers Price Index, Wednesday’s retail sales, and the fall in today’s initial jobless claims suggest that the fight against high inflation is still ongoing.[2]<\/a><\/sup><\/p>\n

The 10-Year US Treasury yields are climbing, putting further pressure on longer-duration assets, while oil prices are trading lower due to Fed hike fears.[2]<\/a><\/sup> Gold investors are hanging on to those recession signals, but with rate signals blowing in the wind, it seems the appetite to add to current positions is small.[3]<\/a><\/sup><\/p>\n

In an ideal scenario, inflation keeps trending downward without increasing unemployment.[4]<\/a><\/sup> Prices stabilize and we avoid a recession.[4]<\/a><\/sup> Lower inflation expectations can reverse the dynamic and help cool inflation.[5]<\/a><\/sup><\/p>\n

It is clear that the Federal Reserve must act cautiously to ensure the economy does not slip into recession. The Fed must continue to raise rates, but at a steady rate, to ensure inflation is kept within target.[0]<\/a><\/sup> We must watch the situation closely to ensure the Fed does not push the economy too far.<\/p>\n

0. <\/span>“Question of the month: How do you maneuver uncertainty in today’s economy? – by Alan Doyle” New England Real Estate Journal Online, 10 Feb. 2023, https:\/\/nerej.com\/question-of-the-month-how-do-you-maneuver-uncertainty-in-today-s-economy-by-alan-doyle<\/a><\/a><\/p>\n

1. <\/span>“Deep Recession or Soft Landing? Where Is the U.S. Economy?” NBC 5 Dallas-Fort Worth, 16 Feb. 2023, https:\/\/www.nbcdfw.com\/news\/business\/deep-recession-or-soft-landing-where-is-the-u-s-economy\/3195330\/<\/a><\/a><\/p>\n

2. <\/span>“In a recession’s shadow” FXStreet, 16 Feb. 2023, https:\/\/www.fxstreet.com\/analysis\/in-a-recessions-shadow-202302162357<\/a><\/a><\/p>\n

3. <\/span>“U.S. Stocks Lower on Macro-Heavy Day Amid Recession Fears” Investing.com, 17 Feb. 2023, https:\/\/www.investing.com\/analysis\/us-stocks-lower-on-macroheavy-day-amid-recession-fears-200635416<\/a><\/a><\/p>\n

4. <\/span>“Is the economy improving? Here’s an explainer, and what to know about debt, jobs, inflation and recession fears.” msnNOW, 13 Feb. 2023, https:\/\/www.msn.com\/en-us\/money\/markets\/is-the-economy-improving-heres-an-explainer-and-what-to-know-about-debt-jobs-inflation-and-recession-fears\/ar-AA17q4ZH<\/a><\/a><\/p>\n

5. <\/span>“Cautious but steady consumers buoying hopes for U.S. economy” Toledo Blade, 16 Feb. 2023, https:\/\/www.toledoblade.com\/business\/retail\/2023\/02\/16\/cautious-but-steady-consumers-buoying-hopes-for-us-economy-1\/stories\/20230216118<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Federal Reserve’s attempts to combat inflation and keep it within its target of 2%\u20133% has led to seven successive rate increases in the past year.[0]<\/a><\/sup> While effective, these hikes have prompted fears amongst economists of a potential recession, as the Fed risks pushing the economy too far, leading to job losses.<\/p>\n

Retail sales rose 3% in January, according to the Commerce Department, and the unemployment rate is at its lowest since May 1969.[1]<\/a><\/sup> Yet the decline in the Philly Fed index and the poor momentum in the US housing market have sparked recession fears amongst investors.[2]<\/a><\/sup> The higher-than-expected Producers Price Index, Wednesday’s retail sales, and the fall in today’s initial jobless claims suggest that the fight against high inflation is still ongoing.[2]<\/a><\/sup><\/p>\n

The 10-Year US Treasury yields are climbing, putting further pressure on longer-duration assets, while oil prices are trading lower due to Fed hike fears.[2]<\/a><\/sup> Gold investors are hanging on to those recession signals, but with rate signals blowing in the wind, it seems the appetite to add to current positions is small.[3]<\/a><\/sup><\/p>\n

In an ideal scenario, inflation keeps trending downward without increasing unemployment.[4]<\/a><\/sup> Prices stabilize and we avoid a recession.[4]<\/a><\/sup> Lower inflation expectations can reverse the dynamic and help cool inflation.[5]<\/a><\/sup><\/p>\n

It is clear that the Federal Reserve must act cautiously to ensure the economy does not slip into recession. The Fed must continue to raise rates, but at a steady rate, to ensure inflation is kept within target.[0]<\/a><\/sup> We must watch the situation closely to ensure the Fed does not push the economy too far.<\/p>\n

0. <\/span>“Question of the month: How do you maneuver uncertainty in today’s economy? – by Alan Doyle” New England Real Estate Journal Online, 10 Feb. 2023, https:\/\/nerej.com\/question-of-the-month-how-do-you-maneuver-uncertainty-in-today-s-economy-by-alan-doyle<\/a><\/a><\/p>\n

1. <\/span>“Deep Recession or Soft Landing? Where Is the U.S. Economy?” NBC 5 Dallas-Fort Worth, 16 Feb. 2023, https:\/\/www.nbcdfw.com\/news\/business\/deep-recession-or-soft-landing-where-is-the-u-s-economy\/3195330\/<\/a><\/a><\/p>\n

2. <\/span>“In a recession’s shadow” FXStreet, 16 Feb. 2023, https:\/\/www.fxstreet.com\/analysis\/in-a-recessions-shadow-202302162357<\/a><\/a><\/p>\n

3. <\/span>“U.S. Stocks Lower on Macro-Heavy Day Amid Recession Fears” Investing.com, 17 Feb. 2023, https:\/\/www.investing.com\/analysis\/us-stocks-lower-on-macroheavy-day-amid-recession-fears-200635416<\/a><\/a><\/p>\n

4. <\/span>“Is the economy improving? Here’s an explainer, and what to know about debt, jobs, inflation and recession fears.” msnNOW, 13 Feb. 2023, https:\/\/www.msn.com\/en-us\/money\/markets\/is-the-economy-improving-heres-an-explainer-and-what-to-know-about-debt-jobs-inflation-and-recession-fears\/ar-AA17q4ZH<\/a><\/a><\/p>\n

5. <\/span>“Cautious but steady consumers buoying hopes for U.S. economy” Toledo Blade, 16 Feb. 2023, https:\/\/www.toledoblade.com\/business\/retail\/2023\/02\/16\/cautious-but-steady-consumers-buoying-hopes-for-us-economy-1\/stories\/20230216118<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":1124,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/1125"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=1125"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/1125\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/1124"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=1125"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=1125"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=1125"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}