Paul Dietrich on LinkedIn: We may be witnessing the last throes of the economy rolling over. I… (2024)

A tale of two economies. Banks are seeing a boost from higher interest rate profits. Meanwhile, small businesses are getting crushed by higher rates and a tightening capital market. This won’t end well

Ever wondered how a potential rate hike could ripple through the economy and affect your business? Let's unpack this.Interest rates are more than just numbers on a page; they're powerful economic tools. When central banks decide to hike rates, it's like tightening the tap on the flow of money. This can lead to more expensive loans for businesses and consumers alike. But why does this matter to you?For starters, if you're a business owner, higher rates could mean your growth plans get pricier. Loans for new equipment or expansion suddenly come with a heftier price tag. And if you're an investor, your portfolio might feel the tremors as higher rates can cool off stock markets.But it's not all gloom and doom. Savers might welcome the boost to their interest earnings. And sometimes, a rate hike is a sign of a strengthening economy – a silver lining we can all appreciate.However, the key is to stay informed and agile. As professionals, we need to keep our fingers on the pulse of these changes. How will you pivot your strategies to stay ahead? Will you adjust your investment portfolio, or perhaps rethink your borrowing plans?#InterestRates #EconomicImpact #BusinessStrategy

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Higher-for-Longer Interest Rate Environment is Squeezing More Borrowers.This is seeing consumers eroding their reserves and companies under pressure from a economic growth and cost of debt perspective. With further pressure being felt related to refinancing or default risk.Elevated inflation means central banks may have to keep policy rates higher in a way that stretches the capacity of borrowers to repay debt.Most economies are absorbing this aggressive policy tightening, showing resilience over the past year, but core inflation remains elevated in several of them and risks to the world economy remain skewed to the downside.With $5.5 trillion debt due over the next 12 months and similar tranches due until 2028, the market remains very precarious.#leadership #finance #strategy #leveragedfinance

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According to top economists from leading U.S. banks, borrowing costs are expected to increase, which may slow down the gross domestic product to 1.2% in 2024 from the estimated 2% this year. ✨ However, there's good news too! ✨ These experts are optimistic that the Federal Reserve can achieve a "soft landing" and effectively control inflation without causing a recession. It's incredible to see how predictions have evolved. Just 8 months ago, these same economists forecasted that growth would stagnate in 2023 and potentially push the U.S. closer to a recession. Stay informed, stay ahead! 📈📊 (Source: BARRONS) #01715440 #LisaCartolano #EllenDiamond #TriciaYoung #CallTheDCGroup #Compass #MortgageRates #EconomicOutlook #StayInformed #EastBayRealEstate #Realestate #AgentsofCompass

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As the economy braces for a slowdown, banks may encounter some significant challenges. Between lower borrowing and trading activity and increased defaults on loans, these financial institutions will bear the brunt of a looming recession. However, I still maintain that bank stocks represent a good option for those investors seeking both growth and income for the longer term.#trading #banks #economy

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Are we entering a new economic reality?The current economy is baffling. Interest rate hikes have cooled things slightly, but equities are still at or near ATH and consumer spending is still very high.That may change over the next 2 years. Consumers can only rack up so much debt until the servicing of that debt is unsustainable. Eventually, the pendulum will sing hard and fast the other direction.This is a pretty good over view on the current state of things.Consider this pull quote, data points and metrics can be changed to fit a desired narrative. This doesn't change the reality."As I have written to you all before, we could even see the Federal Reserve change their inflation target to 3% at some point in an effort to claim victory on this fight"https://lnkd.in/gqdsVMfW

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U.S. bank failures have emerged due to rising interest rates against inflation. While many banks managed to navigate their losses, some were less equipped to do so. The amplification of these losses was propelled by a slow economy, alongside appealing rates offered by alternatives like money market funds. The Fed has acknowledged its own errors, prompting a revived interest in reestablishing tighter regulations. However, the assurance of a smooth economic transition is still uncertain. Read more of my thoughts on my blog: https://bit.ly/3P4aJbt #inflation #USeconomy #thoughtleadership

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🏢 Attention Business Owners! 📈 Understanding Inflation Matters: Rising prices impact costs, wages, and customer behavior. Monitor economic indicators, optimize costs, and consider diverse investments. Stay resilient with a well-informed inflation strategy. 💼 Impact on Interest Rates: Inflation influences central banks toadjust interest rates. Higher inflation may prompt them to raise rates tocombat price surges, making borrowing more expensive for your business.Evaluate your borrowing needs carefully to navigate changing interest rateenvironments effectively.#Business #Inflation#FinancialAdvice #InterestRates

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The post-pandemic economy poses challenges for central bankers due to differing experiences between renters and homeowners. Learn more in the latest #WeeklyMarketCommentary below:https://hubs.la/Q02y2Krg0

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