Fed rate hikes: Cause for pause?
Fed watchers see potential for a pause in rate increases, but recent reports show the economy still runs hot.
After a solid third quarter, the economy could be poised for even faster growth in the fourth quarter in deference to the sharp rate tightening by the Fed. While higher borrowing rates should eventually tamp down hiring by businesses, strong job gains continue to support spending activity — with the labor market likely to keep some momentum into the new year. This should stave off recession conditions early in 2023, but a moderate contraction still appears likely later next year in response to further Fed rate increases, corporations diminished pricing power, and an earnings growth slowdown.
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