The future cannot be reliably predicted since we lack a crystal ball. This is particularly true when it comes to economic concerns like real estate, interest rates, inflationary pressures, governmental acts, global influences, and investment. What effects do things like interest rates, inflation, recession, and Federal Reserve Bank decisions have? How can one hedge their bet in order to reduce unneeded risks and still earn a respectable return? Since there are so many variables at play, there is no easy solution. In order to give readers a more thorough grasp of the possibilities, this article will aim to briefly analyze, examine, and review potential causes.
1) Interest rates: We have experienced a prolonged period of historically – low – interest rates. This has created easy money, because the cost of borrowing is so low. Both individuals and corporations have benefited, at least, in the immediate- term, permitting home buyers to purchase more house, because their monthly charges, are low, due to low mortgage rates. Corporate and government bonds, and banks, have paid low returns. It has stemmed, inflation, and created a rise in home prices, we haven’t witnessed, in recent memory. The Federal Reserve 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, significantly, 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 created the initial, new, trillion dollars deficits
4) Government spending, caused by the financial suffering and challenges, because of shut downs, etc, because of the pandemic, created trillions more in debt. Unfortunately, debt must be eventually addressed.
5) Perception and attitude: The past couple of years,apparently, created a public perception, plus many fears, with a crippling economic impact.
Either, we begin to plan, effectively, and with common sense and an open – mind, many will be at – risk. Wake up, America, and demand better leadership, service and representation.
