Part 8/10:
While current data provides room for the Fed to hold rates steady, the aggressive rate hikes of recent months have already impacted the economy. If inflation persists or if signs of slowdown accelerate, further increases could be on the table, risking an economic contraction.
The delicate balance the Fed faces underscores the importance of upcoming economic releases and the GDP data’s role in informing their decisions.
Final Thoughts: Will Growth Continue?
The positive GDP figures are undoubtedly encouraging, signaling robust resilience amid adversity. However, the underlying vulnerabilities—declining income, savings erosion, high debt levels, and softening manufacturing and employment data—cast a shadow over the sustainability of this growth.