Since, we don’t have a crystal ball, it is impossible to predict, precisely, the future! This is especially true, when, it comes to economic issues, including investment, real estate, interest rates, inflationary pressures, government actions, international factors, etc. What are the ramifications of inflation, recession, interest rates, Federal save Bank decisions, etc? How can one, hedge – his – bet, in order to minimize unnecessary risks, while receiving a quality return, also? There is no simple answer, because so many factors, have meaningful influences. With, that in mind, this article will attempt to briefly, consider, examine and review possible factors, in order to help readers, have a more – complete understanding of the possibilities.
1) Interest rates: We have experienced a prolonged period of historically – low – interest rates. This has produced easy money, because the cost of borrowing is so low. Both individuals and corporations have benefited, at the minimum, in the immediate- term, permitting home buyers to buy more house, because their monthly charges, are low, due to low mortgage rates. Corporate and government bonds, and edges, have paid low returns. It has stemmed, inflation, and produced a rise in home prices, we haven’t witnessed, in recent memory. The Federal save Bank has signaled they will be ending this propping – up, and will also raise rates, probably three times, in 2022. What do you think that will cause.
2) Auto loans, consumer loans, borrowing: The auto industry has been, considerably, impacted by supply chain challenges. When rates rise, auto loans and leases, will be more costly.
3) THis pattern began after the Tax Reform legislation, passed at the end of 2017, which produced the initial, new, trillion dollars deficits
4) Government spending, caused by the financial experiencing and challenges, because of shut downs, etc, because of the pandemic, produced trillions more in debt. Unfortunately, debt must be ultimately addressed.
5) Perception and attitude: The past associate of years,seemingly, produced a public perception, plus many fears, with a crippling economic impact.
Either, we begin to plan, effectively, and with shared sense and an open – mind, many will be at – risk. Wake up, America, and need better leadership, service and representation.