Close Menu
Active Puls NewsActive Puls News
  • Home
  • Business
    • Real estate
    • Tech
  • Politics
  • Crypto
  • Entrepreneur
  • Lifestyle
    • Health
    • Marketing
  • Parenting
    • Relations

Subscribe to Updates

Subscribe to our newsletter and never miss our latest news

Subscribe my Newsletter for New Posts & tips Let's stay updated!


What's Hot

If air pods and glasses can become hearing aids, why isn't everyone wearing them?

14 May 2025

US-UK Trade Contract: What do you know?

9 May 2025

Trump's tariffs are already destroying jobs

5 May 2025
Facebook X (Twitter) Instagram
Facebook X (Twitter) Instagram
Active Puls NewsActive Puls News
Subscribe
  • Home
  • Business
    1. Real estate
    2. Tech
    3. View All

    Exxe Group is working on high-tech real estate monetization and Frankfurt transactions

    18 March 2025

    Macomb County real estate transfers recorded Sept. 30-Oct. 4, 2024 – Macomb Daily

    9 March 2025

    Madison County Real Estate: See all homes sold from October 19th to October 25th.

    27 October 2024

    Overview: Commercial Real Estate in Q2

    24 October 2024

    Riverview Gabriel Richard tops Pontiac Arts and Technology for the first state title of school in boys basketball

    16 March 2025

    Six big takeouts from Georgia Tech's Blowout Loss to Wake Forest

    9 March 2025

    Randomized controlled trials remain the gold standard for ED Tech Research – 74

    10 February 2025

    Top cryptocurrencies to buy before they soar 1,400%, according to tech billionaire Jack Dorsey

    30 October 2024

    Wayne Gretzky sues former business partner after controversy with weight loss products

    16 March 2025

    Opinion | Mask Tweet Fuel Bubble may be about to burst

    9 March 2025

    My best friend and I built a multi-million dollar business together

    8 March 2025

    West Bottoms Business Closes Due to Rent Increases, Uncertain Economy

    8 March 2025
  • Politics
  • Crypto

    Crypto Trader converts $232 to $1.1 million.

    18 March 2025

    Why crypto prices are unstable despite policy support?

    16 March 2025

    As Bitcoin stagnates, safer bets

    9 March 2025

    “Bloody Awful!”: Martin Lewis hits with Crypto Scams. scam

    8 March 2025

    Dogecoin outperforms PEPE, but Rollblock's token could be the next big crypto

    9 November 2024
  • Entrepreneur

    Local authors and entrepreneurs make waves with new books

    9 March 2025

    Google hires AI to write 25% of its code: earnings announcement

    30 October 2024

    Decoding the stock market dichotomy

    26 October 2024

    Invent Penn State launches alumni entrepreneurship network for university alumni

    23 October 2024

    Black Book Named One of America's Top 15 Local Nightlife Spots by Entrepreneur Magazine –

    19 October 2024
  • Lifestyle
    1. Health
    2. Marketing
    3. View All

    Angel City's Sydney Leroux is away from football via mental health

    16 March 2025

    Financing Options Table for African Health Product Manufacturing – Africa CDC

    9 March 2025

    How Nature Can Provide a Cure for Sudden Urinary Leaks: The Power of Natural Remedies for Urinary Microbiome Health

    18 November 2024

    Atrium Health cancels home liens for unpaid medical bills, providing relief to thousands as debt crisis mounts

    16 November 2024

    See the future marketing role of the Duluth Contract Cements Organization – Duluth News Tribune

    9 March 2025

    MLB, Murakami Takahashi Partner of Japan's Marketing Push

    27 February 2025

    Nike names new heads of sports marketing and legal departments

    31 October 2024

    Marketing in Wyoming is on the ballot this election. In Cody, some people are concerned about how the lodging tax money will be spent.

    31 October 2024

    US Ski & Snowboard agrees to a three-year partnership with retailer J.Crew for its lifestyle apparel line

    20 March 2025

    Angel City's Sydney Leroux is away from football via mental health

    16 March 2025

    Financing Options Table for African Health Product Manufacturing – Africa CDC

    9 March 2025

    Lifestyle News Live Today March 9, 2025: 60% of adults are overweight by 2050. Experts reveal four ways to reverse this trend

    9 March 2025
  • Parenting
    1. Relations
    2. View All

    13 Gift Ideas That Your Girlfriend Will Appreciate As Birthday Surprises

    22 January 2021

    7 Things Every Couple Should Know About Each Other

    17 January 2021

    My Mother Curses Me Every Day; What to Do?

    17 January 2021

    How to Be Friends With Your Sibling: Research Topic

    15 January 2021

    How to handle it when your parents are much better for your child than you.

    9 March 2025

    Abuse blogger Ruby Franke's daughter warns parents about posting photos of their children

    27 October 2024

    Why 'tough love' doesn't produce resilient, successful children: Parenting experts

    23 October 2024

    My child's teacher assigned my son a project that definitely makes him an incel

    20 October 2024
Active Puls NewsActive Puls News
Home » Federal Reserve rate hikes are no match for American consumers
Business

Federal Reserve rate hikes are no match for American consumers

activepulsnewsBy activepulsnews13 February 2024No Comments8 Mins Read0 Views
Facebook Twitter Pinterest LinkedIn Tumblr Email
Share
Facebook Twitter LinkedIn Pinterest WhatsApp Email


As the Rockettes high-kicked to record-breaking box office success at the annual “Christmas Spectacular” at New York's Radio City Music Hall, they weren't just entertaining.

They also showed the limits of the Federal Reserve's power over the economy.

If the Fed's interest rate hikes had worked as they have in the past post-pandemic, Americans would have responded by cutting back on spending. Instead, the economy has moved forward largely unscathed.

Demand for Rockettes tickets was so high that the dance troupe added eight shows to its schedule and extended its Christmas special into the first week of January. More than 1 million customers watched the holiday performance.

Elsewhere, companies like Hilton, Ford and Chipotle benefited as consumers and businesses opened their wallets. Despite the fastest interest rate rise in 40 years, the economy is hotter today than it was when the Fed first raised borrowing costs in March 2022. The 353,000 jobs created last month was the highest monthly total since January 2023.

“Even though the Fed is raising rates, people aren't feeling it,” said Nathan Sheets, global chief economist at Citigroup.

Strong economic growth could ease recession fears and delay the Fed's long-awaited move to cut interest rates.

Rising U.S. economic growth and falling inflation offset recession concerns

When the Fed fights inflation, it typically raises interest rates to discourage consumers and businesses from borrowing. A decline in personal and business loans leads to lower demand for all types of goods, slowing the economy and reducing pressure on prices.

That was the thinking when the Fed began raising interest rates two years ago, when U.S. inflation approached levels not seen since the early 1980s. The Fed's benchmark lending rate rose from near zero to its current level of over 5% in less than 18 months.

However, the results were unexpected.

Higher interest rates typically push up the value of the dollar, widening the trade deficit as foreign goods become more affordable while U.S. exports suffer, said Dean Baker, an economist at the Center for Economic Policy Research.

But this time, many other central banks were raising interest rates to fight inflation. Therefore, the dollar's rise was not sustained. And the trade deficit narrowed rather than widened as consumers stopped buying imported goods and started spending more on in-person services like movies and dining out.

The last time the Fed raised interest rates significantly was in the spring of 2004, when economic growth slowed from about 3% to less than 1% two years later.

Today's economy has been able to avoid rising interest rates in part because borrowing costs were at an unprecedented low following the 2008 financial crisis.

After adjusting for inflation, credit was effectively free for most of the period from 2008 to 2022. According to Sheetz, this era of easy money has allowed many consumers and businesses to refinance their debt and lock in ultra-low interest rates.

The New York Fed said last year that in the latest wave of mortgage refinances, 14 million Americans “will benefit from historically low interest rates and enjoy low financing costs for decades to come.” .

Debt service as a percentage of disposable income is no larger than it was when the Fed started raising interest rates, and remains slightly lower than it was on the eve of the pandemic.

Now, due in part to the pandemic, many consumers and businesses are less sensitive to interest rate increases than they were in the past.

For most of the past few years, millions of consumers have had more cash than usual. Stuck at home and aided by government stimulus checks, Americans hoarded money. Excess liquid assets peaked at an estimated $1.5 trillion in early 2022, according to Eric Winograd, director of developed market economic research at AllianceBernstein.

Economists say there were some silver linings to the supply chain congestion that has been a major headache during the pandemic. This is due to prolonged spending on products such as cars.

Houthi attacks begin to restructure delivery flows

Americans who couldn't find a car to buy in 2021 or 2022 are finally buying one. And by the time the cars were on dealer lots, many shoppers were willing to pay a higher price. A total of 16.6 million cars were sold in December, compared to just 14 million two years ago.

“Despite this tightening cycle, the economy has outperformed even the most optimistic expectations,” Winograd said. “But we've used up almost all of that excess savings. We don't have that cushion anymore.”

As these temporary factors fade, interest rate increases may eventually start to come to a halt. Minutes from the Fed's December meeting said higher interest rates caused some companies to “reevaluate future projects, contributing to softer business investment and employment.” Small businesses faced a credit crunch.

The percentage of auto loans that are 90 days past due has just surpassed pre-pandemic levels. Delinquent credit card balances are also higher than in 2019, according to the New York Fed.

This complex situation, with an economy that is growing rapidly despite rising interest rates but showing signs of stress, is encouraging the Fed to properly time its first rate cuts, expected as early as May. is putting pressure on.

Federal Reserve Chairman Jerome H. Powell said in late January that rising interest rates were having an impact on the economy, particularly through the housing market. Fed interest rate hikes reduce demand by making credit more expensive. In fact, sales of new homes declined in the second half of last year as 30-year mortgage rates approached 8%.

But Powell acknowledged that other factors outside the Fed's control are also lowering inflation, such as improved supply chain performance and more Americans returning to the workforce.

It has also effectively shielded parts of the economy from the full force of credit tightening. But once companies solve the final problems in their freight operations and available labor stops increasing, these supply-side benefits will fade and the cost of higher rates will become even greater.

“The restrictions are probably going to be more pronounced,” Powell said.

In the housing construction industry, which tends to be sensitive to rising interest rates, Baker said supply chain disruptions also effectively extended some activities and helped strengthen the economy.

New housing starts have fallen by almost 20% from the April 2022 level of 1.8 million. However, the number of homes under construction, which typically declines with construction starts, has remained stable at about 1.7 million. Baker said construction of the homes is taking longer because of delays in getting the necessary materials.

The good news is that as a result of these obstacles, home construction employment remains at its highest level since September 2007.

That may be starting to change.

Homebuilder Pulte Group expects to be able to build new homes by the end of this year at roughly the same speed as before the pandemic. The company told analysts last week that operations were returning to a “predictable schedule” thanks to more reliable deliveries of construction materials.

“We were literally waiting for the material to come out,” said Ryan Marshall, CEO of Pulte Group.

Japan's bid for US Steel challenges Biden's approach to global economy

Many economists expected unemployment to rise before inflation was brought under control. Former Treasury Secretary Lawrence Summers said in June 2022 that the unemployment rate would need to reach 6% and remain there for five years before consumer prices would stabilize.

Instead, the unemployment rate has barely changed, from 3.6% when the Fed started raising interest rates to 3.7% now. In each of the past three months, more Americans have found new jobs than in the previous month.

The job market has been supported by a gradual return to pre-pandemic patterns in consumer spending. After splurging on products like furniture, televisions, and clothing, consumers now spend more money on travel, entertainment, and other personal experiences.

Hilton Hotels welcomed a record number of guests last year, adding 24,000 new rooms in the final three months of 2023, the largest quarter ever. The lodging chain's revenue per available room, the standard industry benchmark, increased by almost 13%.

“Demand is very strong,” Christopher J. Nassetta, CEO of Hilton Worldwide, told investors last week. “Consumers, especially our consumers, the median income level is pretty good, in the $140,000 to $150,000 range, and they still have plenty of money and they still have the desire to travel. There is enough.”

Such spending in travel, leisure and hospitality is about three times more labor-intensive than commodity-producing industries, Sheets said. For example, Chipotle's Mexican Grill plans to hire 19,000 new employees for the spring busy season. JPMorgan Chase similarly said it has 3,500 job openings for its retail store network expansion plans.

Spending on in-person services is tightening the labor market, which means higher wages. Inflation-adjusted hourly wages for manufacturing and nonsupervisory employees rose 1% over the past year, according to the Labor Department. These high salaries mean Americans have disposable income to continue spending on trips to New York.

The Rockets' owner, Madison Square Garden Entertainment, told investors it plans to take advantage of strong demand by increasing ticket prices for its upcoming Christmas performance. Tickets for the 2023 show he started at $49.

MSG also reported a “significant double-digit increase” in ticket sales for the music concerts it hosts over the next six months.

Entertainers such as Billy Joel, Nicki Minaj and Justin Timberlake are also scheduled to perform at the garden. Tickets for these performances start at around $200 and can exceed $4,800 for floor seating, according to MSG's website.

“We're really pleased with how this year has played out,” said Ali Daines, senior vice president of investor relations. “This business is clearly growing faster than we originally anticipated.”



Source link

Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
Previous ArticleGeorgia Tech #ProJackets Golf Report – Men’s Golf — Georgia Tech Yellow Jackets
Next Article Upcoming workshops and classes for new and experienced parents
activepulsnews
  • Website

Related Posts

Wayne Gretzky sues former business partner after controversy with weight loss products

16 March 2025

Opinion | Mask Tweet Fuel Bubble may be about to burst

9 March 2025

My best friend and I built a multi-million dollar business together

8 March 2025

Comments are closed.

Latest Posts

If air pods and glasses can become hearing aids, why isn't everyone wearing them?

14 May 20251 Views

US-UK Trade Contract: What do you know?

9 May 20251 Views

Trump's tariffs are already destroying jobs

5 May 20251 Views

Judge Rule Trump cannot use alien enemies for deportation

2 May 20251 Views
Don't Miss

Nigeria SEC aims to raise registration fees for virtual currency exchanges

By activepulsnews16 March 2024

Nigeria's Securities and Exchange Commission (SEC) has proposed amendments to the rules guiding platforms offering…

The Key to Women’s Health After 35: Nature’s Remedies for Urinary Health

23 November 2024

A psychologist explains the appeal of “pet parenting'' for childless couples

16 March 2024

Subscribe to Updates

Subscribe to our newsletter and never miss our latest news

Subscribe my Newsletter for New Posts & tips Let's stay updated!


Check out this product on Amazon
About Us
About Us

Welcome to ActivePulseNews.com, your go-to destination for insightful and up-to-date information on Crypto, Marketing, and Lifestyle. We are a dedicated team passionate about delivering content that resonates with your interests and keeps you informed about the latest trends and developments in these dynamic fields.

Facebook X (Twitter) Pinterest YouTube WhatsApp
Our Picks

Crypto Trader converts $232 to $1.1 million.

18 March 2025

Why crypto prices are unstable despite policy support?

16 March 2025

As Bitcoin stagnates, safer bets

9 March 2025
Most Popular

Nigeria SEC aims to raise registration fees for virtual currency exchanges

16 March 2024270 Views

The Key to Women’s Health After 35: Nature’s Remedies for Urinary Health

23 November 2024128 Views

A psychologist explains the appeal of “pet parenting'' for childless couples

16 March 202462 Views
© 2025 activepulsnews. Designed by activepulsnews.
  • Home
  • About Us
  • Contact us
  • DMCA
  • Privacy Policy

Type above and press Enter to search. Press Esc to cancel.