Believe me, I’d much rather post a joke than news like this, but the news just refuses to cooperate. Wednesday, as the Biden White House once again reassured us that the economy is doing just super, the Commerce Department reported that retail sales dropped by 0.3% in May. That’s likely because Americans are putting so much money into their gas tanks, they’re cutting back on other spending.
Then on the same day came part two of the double whammy: the Fed announced that to try to bring down inflation, it was raising interest rates by .75% of a point, the biggest hike since 1994. And it’s likely not to be the last.
The Fed assured Americans that it was not trying to deliberately induce a recession. How reassuring. Some analysts are saying that while we may “technically” already be in a recession, it’s not likely to feel like one to consumers.
That’s funny, because just last week, another analyst was saying that we may not technically be in a recession, but to consumers, it feels like we are.
That does remind me of an old joke: that if you laid all the economists end-to-end, they still wouldn’t point in the same direction.
To try to end on a positive, or at least helpful, note, here are some things you should be doing now to protect yourself from the potential effects of higher interest rates.