Looming recessionary threat

26 SEP,2022 | MEDC


The Chair of the US Federal Reserve Jerome Powell finally acknowledged what many economists long suspected – that the Fed's goal of engineering a soft landing (wherein growth would be slowed enough to curb inflation but not enough to cause recession) looks increasingly unlikely. Fed officials also predict more interest-rate hikes over time. By raising borrowing rates, government makes it costlier for businesses to expand their activities. Consumers then tend to spend less, cooling the economy and reducing inflation (and growth). US interest rates have never been this high in recent history, and their spill-over effects could manifest themselves in our markets. With countries worldwide slamming their economic brakes simultaneously, a global recession could strike sooner than anticipated. India had better be prepared.

*Picture Credit:Google

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