Both interest rates and inflation are indicating that we might not have fully overcome the economic challenges caused by the pandemic. The Federal Reserve (the Fed) is actively trying to control inflation by adjusting interest rates. However, this effort is causing significant fluctuations in the market’s stability.
Over the past few weeks, we’ve witnessed notable swings in the market. In this video, Ed Butowsky delves into what investors should pay attention to. Normally, this topic might primarily concern only those who invest in bonds and fixed-income assets. Yet, it’s becoming evident that these developments are also affecting the equity markets, which are associated with stocks and ownership in companies.
- The aftermath of the pandemic’s economic impact might not have concluded, considering the ongoing increase in interest rates.
- Both housing and non-housing sectors are experiencing a growing total debt burden, as clearly depicted in the video’s charts.
- Elevated interest rates translate to higher corporate interest payments, consequently leading to reduced company earnings and potentially underperforming stocks.
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