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By Patrick O’Donnell
The US central bank’s decision to not cut interest rates could provoke a recession, experts claim
A US recession warning has been issued after global stocks plummeted amid widespread anxiety that the American economy is at risk of a financial “collapse”. These concerns have risen after the Federal Reserve’s refusal to cut interest rates earlier this week with many analysts wondering if the central bank has left it too late.
This Thursday, the Dow Jones Industrial Average fell nearly 500 points, as investors’ fears over a recession moved closer to becoming reality. The Dow dipped 494.82 points, or 1.21 per cent, to end at 40,347.97. This comes as unemployment jumped to 4.3 per cent the highest since October 2021.
In July, the US economy only added 114,000 jobs, coming in well under previous expectations. Economists polled by Reuters forecasted 175,000 new jobs. Richard Flynn, Managing Director at Charles Schwab UK, said: “Today’s weak jobs report indicates that demand for labour is losing pace.
“The recent loosening in the jobs market has been a positive indicator for inflation prospects, as too much activity can be a precursor to demand-side pressure on prices. Since inflation figures have come into shooting distance of the Fed’s target, however, the balance of risks has begun to change.
“Today’s figures may stir anxieties that central bankers haven’t moved fast enough to cut rates, nudging the jobs market into a downward spiral. The Fed’s lengthy hiking campaign is so close to achieving its objective for inflation – let’s hope that success on that front doesn’t cause the labour market to tumble.”
Despite inflation easing in the United States, the Fed opted to keep the Federal Funds Rate at its 23-year high of between five to 5.25 per cent. This is despite the fact other central banks, including the Bank of England, are taking action to reduce their respective base rates.
Traders have now told The Telegraph that they are surprised at the extend of the fall in stocks. This week, Japan’s Nikkei 225 index closed down 2,216.63 points, representing its second-largest points drop in its history. The plunge came about after weaker than projected factory data from the US revealed output fell to an eight-month low in July.
Initial weekly jobless benefit claims made by Americans jumped to the highest level in 12 months over the period.
Furthermore, the pan-European Stoxx 600 index slumped by 2.15 per cent to a three-month low while Germany’s Dax fell to as much as 1.98 per cent.
The Cac 40 in France dropped sharping to 1.1 per cent with he FTSE 100 dipping by as much as 1.07 per cent.
With markets plummeting sharply overnight and this morning, analysts are sounding the alarm that the Federal Reserve needs to take action as soon as possible.
The Federal Open Market Committee (FOMC) has only three interest rate announcements left to make this year.
Traders are predicting that the committee will need to complete 1.75 percentage points of interest rate cuts this year to prevent a recession taking place.
To compound existing market concerns, Big Tech giants posted poor results this week, including Apple and Amazon.
Despite Federal Reserve chairman Jerome Powell hinting at a future rate cut in September, investors appear to be spooked.
[…]
Via https://www.gbnews.com/money/recession-warning-interest-rate-us
The Most Revolutionary Act 
“Despite inflation easing in the United States”
That is a GIGANTIC LIE!! It is not just food prices that are still skyrocketing. Everything over here is overpriced, and no, prices are not falling. Greed of corporate scum is still at an all-time high and factor in the especially greedy landlords, and so, where is inflation easing when millions are sitting out on the streets because they cannot afford a roof over their heads? When housing costs fall as well as food prices, then we can talk about inflation easing, but until then, there is NO inflation easing. Those scumbags make me want to puke with their vicious lies!!! Not to mention, people are losing their jobs, left and right. People are claiming to have sent out hundreds of resumes, and after two years and are still jobless. The situation is so bad over here that more and more people are questioning why more and more surveillance is being thrown up. It is because of what is about to hit the fan.
Folks better get their money out of the banks, get small bills, and hide them in their homes because what’s coming is going to make the most recent global IT outage look like a science fiction movie. Open your eyes, the signs are everywhere!
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Shelby, Reuters came out with a story the same day that food inflation is 25% over 3 years. Besides cash people need to stock up on non-perishables, such as rice and dried beans. Things are going to get a lot worse before they get better.
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