The markets are not buying what the Federal Reserve is attempting to sell in terms of their claims about the strength of the United States’ economy. In fact, more fears about the global economy have surfaced after the Fed’s recent shift in gears.
A surprisingly dovish turn by the Federal Reserve and intense new worries have rattled Wall Street, sparking more recession fears and concerns about a global economic slowdown. But it’s nothing that a week or two of good news can’t cure, right? As long as you listen to the Fed, who is promising to take care of all of us in the event of an economic meltdown.
According to Market Watch, some good news may fix the skittish feeling about the economy, but that good news is also not likely going to surface this week. Especially considering there’s speculation that the reports trickling in about the U.S.’s economic state could still be effects of the partial government shutdown.
Everyday Americans base their understanding of the economy on how well they can see things around them going. Certain economic indicators, such as home sales and new construction, can be symptoms of the steep drop in mortgage rates since last October. The housing market has been hanging on by a thread, however, which doesn’t go very far with alleviating worries about the economy.
Even though Fed Chairman Jerome Powell described the U.S. economy as being “in a good place,” the decline in inflation can’t be disentangled from a slower growth in the U.S. and abroad. The Fed itself cut its U.S. growth forecast to 2.1% from 2.3%, compared to 2.9% in 2018. –Market Watch
Central banks are also preparing for the upcoming economic slowdown. The Trump administration’s war on free trade has also stomped on the economic growth potential. The tariffs have affected most Americans at this point, and have hit that 78% who live paycheck to paycheck hard in the form of higher costs for goods and services.