The Potential Fallout of a Fed Interest Rate Hike
The labor market added 211,000 jobs in November, bringing the latest 12 month average to 220,000. This 12-month total is better than it was in 2006, the year preceding the Great Recession. Given the growth in jobs and the unemployment rate of 5 percent, financial analysts are focused on one question: will the Federal Reserve raise interest rates? The answer is almost certainly yes.
Ironically a second, equally important question is not being asked. Specifically, has the economic recovery peaked? If so, by increasing the interest rates now, the Federal Reserve may put other brakes on an economy that is about to slow down because it has reached its high point.
Topics: Business, Policy & Economy,