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Will Interest Rate Hikes Drive Us Down? USMR Market Insights

Aug 27, 2018

While the Fed expects further interest rate hikes later down the road, policymakers have also issued a stern warning about the growing threat of trade wars and their economic impact. How will this affect your personal finances?

Will Interest Rate Hikes Drive Us Down?- Video Transcription

Patrick Brunson:               00:02
This week, one of the biggest things we've been seeing in the news is the Federal Reserve's market meeting at Jackson Hole. This is a big topic because Jerome Powell, the Federal Reserve Chair, came out and made a speech talking about his outlook on the economy and the direction that everything's going. More importantly, he's talking about the next interest rate hike. He believes that the economy is starting to really move in the right direction. He said he likes the idea that jobs are being created, and income starting to increase. However, he is bringing up one major key factor that worries him a bit and that's president Trump's trade war. A lot of people don't really know how this is all gonna play out because we've never actually had to deal with a trade war like this before and it's really starting to heat up. We're in talks with Russia, we're in talks with Mexico, we're in talks with China and quite frankly, it doesn't really seem like a whole lot is getting done.
Patrick Brunson:               00:57
There's a lot of negotiating, but we're not really seeing a whole lot of these things really affect the market. The one thing we can do is use the past as prologue and what we've seen in the past, is if the Federal Reserve raises interest rates too quickly, that can actually trigger a major recession as well. It happened during the Great Depression. The Federal Reserve raised interest rates way too quickly and it actually took the depression into the great depression. So if we go into this next downturn in the economy, we usually have tools in our toolbox or the Federal Reserve has tools in their toolbox to actually get the economy stimulated and bring the market back to its feet. The problem is is we've already been using these particular key tools. So if we use up all of these tools before we actually go into this next recession, we may not have anything to help us get us out. That's all for today. Thank you for watching the u.s. Money reserve's market insights. If you call the number on your screen now, a USMR representative will provide you access to your physical copy of ‘why this bear market will be different‘. For instant access, you can also click on the link below and we can send you out an e-copy of this particular report as well. That's all for today. Thank you for tuning in to us. Money Reserve's, market insights.
 

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