Sharply higher interest rates led by a tightening Fed will have many consequences, presently manifesting with the recent challenges with several banks. Change in the interest rate environment was way overdue and a game changer for how banks manage their balance sheets. There will be other consequences yet ahead as the economy slows, unemployment rises, and inflation falls – all part of the Fed’s intentional strategy to undo the unintended consequences of the COVID world that included the massive infusion of cash from our government and the Federal Reserve. Even if inflation stops rising – prices are still high. Day to day living is difficult for many Americans. Like it or not, the Fed is doing exactly what it should do in order to help the US regain its financial footing and enhance the long term growth prospects of the economy.
Bill's Blog - Banks again?
