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Fed’s swift interest rate pivot in Nov.: A panic-induced move

By Howard Applebaum, Corporate America Realty & Advisors


Rutherford, NJ — I believe in the “Lag Effect” and that the economy historically moves several months behind Federal Reserve Bank interest rate adjustments. Most of us are now aware that the FED should have started gradually raising interest rates at least 1 year earlier than when they began in March 2022 in their “quest” to bring inflation down to a 2% annual rate.

Instead, they mad-dashedly rushed to parabolically raise interest rates by 500 basis points from March 2022 until they hit their “Emergency Brakes” in November 2023. The FED decided to pause raising the borrowing costs they charge their member banks.

Jerome Powell, the head of The Federal Reserve Bank, and his cadre of board members (Biden appointed four) saw accelerating “numbers” in various sectors of the economy in their attempt to slow down the overall US Economy through their rapid interest rate policies.

The Federal Reserve Bank’s Board of Governors “cadre” sees “economic data/numbers” well before publicly publishing them!

There has been a historical “Lag Effect” that results from the effects of FED Interest swing(s) (up or down) that take about historically 5-9 months for the Nation’s Economy to react to.

2024 is a significant political year, with an upcoming Presidential Election!

The “cadre” saw various sectors of the economy heading towards or already starting to be affected by their pre-planned damage (higher interest rates) to slow inflation, which was accelerating quicker than “designed.”

Inflation is slowing down to about 3.5% annual levels. Will the FED, with its’ delayed action of Failing to gradually raise interest rates, perhaps starting in March 2021 rather than waiting approximately one year later (March 2022), and their delayed rapidly increasing interest rate moves (500 “basis points” in a year, possibly now head us into create a period of “Deflation of prices, layoffs, bankruptcies and maybe worse”?

Stay tuned!

May 2024 be a profitable year and may you reach your professional goals with many industrial and Commercial real estate deals.

Howard Applebaum is president of Corporate America Realty & Advisors.

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