Is there a significant risk of recession in the U.S?
Credit market turmoil and housing slump have hurt wealth while recent frictions have made enough face for FED to respond with lower costs of borrowing. It is expected that FED will reduced the key interest rate. At the same, the credit expansion could endanger favorable growth prospects respectively. Due to abovementioned housing slump, consumer spending faces a significant risk because of the recent wealth depreciation. Predictably, consumption which accounts for two-thirds of the U.S. economy is expected to decline and tranquil temporarily. Also, consumer confidence shrank recently. According to the figures, the U.S. economy waved a feel of strength before credit markets were defaulted with morgage borrowers.
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