🟨 RECESSION? - TIGHTER CREDIT CONDITIONSFED CHAIRMAN POWELL'S STATEMENT 🎙️
Chairman Powell remains flexible regarding future rate hikes, emphasizing that decisions will be taken on a meeting-by-meeting basis. Notably, the removal of the word "anticipates" indicates a decrease in urgency for additional rate increases. Furthermore, the absence of the phrase "sufficiently restrictive" suggests that current policy has reached the desired level.
LENDING AND CREDIT CONDITIONS 💳
The Federal Reserve is closely monitoring lending and credit conditions as tighter credit may replace some of the rate hikes that could have been necessary. The current approach can be described as a "hope and pray" policy, where the Fed relies on falling inflation and tighter credit conditions to achieve a sufficiently restrictive stance, while hoping no other issues arise.
POTENTIAL RECESSION ON THE HORIZON? 📉
Tighter credit conditions might lead to a recession. However, it is essential to determine how much of this possibility has already been factored into the market.
