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Journalist Nicknamed FED Mouthpiece Warns About US Economy

Author: Content Editor
According to Wall Street Journal reporter Nick Timiraos, recent interest rate cuts by the Federal Reserve may not be enough to ensure a smooth transition for the US economy. Timiraos states that the success of the rate cuts depends on the willingness of businesses and consumers to borrow under the new conditions, as many may be hesitant due to higher current interest rates compared to the rates locked in years ago on fixed-rate loans. The gap between the falling marginal cost of debt and the rising average interest rate on existing debt could limit the stimulating effect of rate cuts, as borrowers may choose to keep their lower-cost loans rather than take on new, potentially higher-cost debt. The uncertain economic strategy and market response make a soft landing for the US economy, where it slows down without going into a recession, questionable.

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