Could we possibly see even worse economic conditions?
Could we possibly see even worse economic conditions?
In today's blog, the topic of discussion is going to be the possibility of seeing even worse economic conditions than we are currently experiencing. I'm going to cover why this could happen when it's going to happen, and for how long. This is going to be a very important and informative article. So make sure you stick around and read the whole article to get a good idea of where the economy is heading. So without furthermore to be said let's get into today's important article.
Why the economy can get worse
So to start I should start by saying that we haven't even seen the worse yet from the economy. There are a lot of things that can still happen that can drag us down. The biggest and probably most well-known one is the FED's current economic policy. Jerome Powell has yet to bring in the harshest of interest rate hikes yet. This means we can still experience pain in the economy we have yet to see. On top of that, the stock market has yet to take a big hit. Although it has gotten pretty low in the stock market, especially with tech companies it has yet to take a big hit. The S&P 500 just had one of its best daily gains this week after months of losses showing that the economy is in a mixed state right now. So with those two conditions, we can at the very least not expect the economy to pick up anytime soon. Consumer spending is also expected to slow in the coming months in preparation for the holiday season and increasing energy prices for the winter which will mostly affect the northern states and Europe. Although it's possible to see gas go back up considering it has been the last few weeks and considering the Nord stream line destruction which is sure to cause energy and gas prices to go up, especially in Europe. which is another sign the economy is going to get worse or at the very least not improve anytime soon.
When can we see worsening economic conditions?
The closest that we'll get till we start feeling worsening economic conditions is either wintertime for the United States or possibly fall for Europe. For Europe, I'm taking into consideration the Ukraine-Russian war which will escalate more in the coming months. Which will likely cut Europe off even more from gas driving prices up in everything. This will also lead to more inflation in Europe possibly even worse than what the united states are experiencing. I predict the winter for the states because likely after the main holiday spending season the FED is going to tighten up on interest rates. This is to stop inflation from getting even more out of hand but gives time for consumers to figure out their holiday spending plans and to prevent companies from rising prices during holiday shopping.
How long could we experience more economic pain?
The simplest answer I can give for this is we are just going to have to wait till inflation gets under control. But to get in more depth we can start seeing improving economic conditions once the energy crisis in Europe gets resolved and once the Ukraine-Russian war also comes to a stop or comes down to a de-escalation. For the states besides waiting for inflation to get under control another set of conditions that need to be fixed is government spending. What I mean by this is the government spending on covid era policies such as increased welfare payments and the insane spending the current administration has had on the education system in particular for college and university students who have debt through the federal government. Once government spending and inflation are under control the economy in the states is likely to improve dramatically.
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