The Federal Reserve may be on the brink of a sharp rate hike reversal, if macroeconomic expert Jeff Snider is right. In a recent video and Twitter post, Snider points to several signs of weakening in the US economy. He claims that the volatility of the financial industry, slowing labor market growth, and the halting of rate hikes in other countries, all suggest that the Fed may be forced to respond by lowering interest rates soon.
The collapse of Silicon Valley Bank and Credit Suisse last month is just one indicator of a negative turn in the economy, according to the macro expert. Adding to that, in March the US saw payrolls grow by 236,000, a number fewer than the jobs added in January.
Snider believes that economic instability and financial disruption may cause the Federal Reserve to change its tactics from combatting inflation to rescuing the American economy from a full-blown recession. Markets are also anticipating this shift, expecting swift rate cuts from the Fed once they happen. This prediction falls in line with the historical reactions of the Federal Reserve in unstable times, such as the dot-com recession in 2001.
In addition to the US' current conditions, central banks like the Reserve Bank of India, the Reserve Bank of Australia, and the Bank of Canada have already paused on their rate hike plans. According to Snider, this could mean that the Federal Reserve's "days of rate hikes are incredibly numbered." As he puts it, all the pieces are coming together for necessary and abrupt reversal of rate hikes, with the Federal Reserve right in the thick of it.
Liam Smith
- 2023-04-12
Could the Federal Reserve Change its Tactics?
Macro-economic expert Jeff Snider claims that the instability in the US economy may force the Federal Reserve to reverse rate hikes in order to save the nation from a full-blown recession. Learn more about what this could mean here.
