The FED must address rising unemployment rates
The FED should not ignore rising unemployment numbers.
The FED’s efforts of taming inflation close to the 2% target have proven successful.
With numerous #interest rate hikes, the fear of #inflation has subsided, yet the rising unemployment numbers are still a cause of concern for the #FED.
To prevent the possibility of an economic downturn, the FED needs to focus on #unemployment numbers.
- As per the current data on #jobgrowth, the risk of rising unemployment is high in 2024.
- To avert severe interest cuts during a downturn, it is advisable to gradually lower them. Starting with a 50-75 basis points decrease in the upcoming quarters. This will prove to be beneficial for corporates to maintain stability and prevent #recession.
- It is crucial to note for a healthy economy, an increase by 50 basis points in unemployment since April is a significant move. A similar pattern was observed in 2001, 2007, 2020 when a hike in unemployment rates preceded recessions.
If, the FED chooses to add another hike to its series of 11 rate hikes since 2022, this may trigger the domino effect making 2024 a challenging year for the global economy.
How will the FED manage the situation of rising unemployment? Will it hike interest rates one last time in 2023 or not is for us to wait and watch. #useconomy #marketdata
