Wednesday, August 9, 2006
Have the Fed tipped the US into recession?
Fears are raised that after 17 consecutive rises in US interest rates the Fed may have tipped the US into recession. After 5 years of robust growth the US economy has decelerated sharply. The consumer has been relying on the steep increases in their housing equity in the past five years to keep up their frenetic pace of spending. But with house prices flat or falling and mortgage rates moving higher, the consumer will need to increase savings and curtail consumption.