On Wednesday, the Federal Reserve announced an interest rate hike of a half-percentage point, the second of its kind since 2018. Many investors have had their eyes on just how high the Fed is prepared to go, and now they will be watching for future hikes even closer. Shortly before the U.S. central bank made its decision to increase rates, it announced a new program to dwindle its balance sheet by approximately $95 billion per month, starting in June.
The continued effects of the turbulent job market across America are compounding a long list of negative economic indicators, all of which point to signs of an impending recession. Current trends indicate that the economic patterns we are seeing this year are unsustainable, but the question remains, what happens next?
Federal Reserve Chairman Jerome Powell’s words are particularly important to many investors who will now begin to shift their holdings to brace for a potential market downturn or even future rate hikes. Expect the stock market to continue its rocky downtrend as Wall Street adjusts to the Feds’ moves and prepares for the central bank to release its next quarterly forecast, which won’t come until June.
According to data released by the Labor Department on Tuesday, the number of job openings in the U.S. climbed to a record 11.5 million in March, while the number of Americans exiting their current jobs climbed to an alarming 4.5 million.
While data does suggest that most people who are quitting their jobs are soon finding other work, often for better pay or in a more cost-effective part of the country, the overall lack of labor and production-based job vacancies is adding to the record inflation felt nationwide. Demand for goods and services is on the rise, and companies are facing production issues that are a direct result of an inability to hold on to employees.
Americans across the country are feeling the pinch of record-breaking inflation, rising mortgage rates and sky-high home prices. Many are frustrated with the increased cost of living and the seemingly absent White House, which continues to kick the can down the road when it comes to economic stabilization. The upcoming 2022 midterm elections will be a referendum on how confident Americans are that the Democratic Party is the right party to lead the nation toward economic recovery.
The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.