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Strategies & Market Trends : News Links and Chart Links
SPXL 222.94+1.0%Dec 3 4:00 PM EST

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To: Les H who wrote (27186)6/30/2022 9:49:18 AM
From: Les H   of 29601
 
$3 trillion in extra savings may push Fed rate hikes too far: Economist

finance.yahoo.com

Slok said the total amount of household and corporate cash in checking accounts is about $3 trillion higher than pre-pandemic trends would've suggested.

The Fed has been raising interest rates to try to decelerate demand growth, and, in turn, inflation. This process typically takes time, as slowing demand trickles down to price stability.

“The risk is that interest rates have to go up more…because it will take time for the Federal Reserve to succeed in cooling things down when there is so much cash among investors,” Slok said.

On the consumer side, people are spending that cash, even as the way they’re spending is changing, shifting from buying stuff to travel and entertainment.
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