What Litigators and Insurers Need to Know About the Increases in U.S. Interest Rates
One of the leading topics in financial markets has been the recent pattern of increased interest rates. Many expect these increases to result in a recession. Indeed, the somewhat Inverted Treasury Yield Curve, is a semi-accurate predictor, or at least often precursor of many recessions. The recent Federal Reserve policies are designed to slow down inflation. This is a result of a blunder by the Fed, and its chairman Jerome Powell, a non-economist with no graduate training at all in the field of economics, who kept pouring in stimulus into the economy and the real estate market even though the economy was red hot. The Fed kept rates close to zero and allowed the money supply to increase by the most it has in a half century. When it started to raise rates, it did so feebly and then quickly reversed course when the market responded negatively. Then time passed, the Ukraine war started, and major supply disruptions occurred. This combined with the over-the-top Biden fiscal stimulus left the nation’s economy in a very high inflation environment. Then, the Powell led Fed tried to play catch up for its incompetence and the U.S. economy and holders of 401(k) and retirement plans are paying the price.