According to a study conducted by Rasmussen Reports on August 22nd, the two most critical problems for voters ahead of the midterms are crime and inflation.
Rasmussen surveyed 1,000 potential voters from August 17-18, with a margin of error of +/- 2%, and found that 86% of respondents were at least somewhat concerned about the increase in violent crime.
Likewise, 85 percent of Americans voiced similar fears over inflation.
Economists cautioned that unless the U.S. Federal Reserve raised interest rates in 2021, U.S. inflation would become a burden for a middle class that was already struggling.
Inflation worsened as a result of the Fed’s refusal to heed the forecasts and its decision to wait until inflation reached historic highs before hiking rates by 0.25 percentage points, which did little to remedy the situation.
Nomura Securities projected that the U.S. Federal Reserve will implement the greatest interest rate increase since the 1980s, based on the recent Consumer Price Index (CPI) report indicating that core prices increased in August.
Nomura Securities informed customers in a research that they expect the Federal Reserve will hike the short-term rate by a stunning 1 percentage point at the September Federal Open Market Committee meeting.
Economists at Nomura Securities have changed their forecast and expect a 100 basis point Fed rate increase next week (followed by 50 bps each in Nov and Dec):
“The August CPI report … suggests a series of upside inflation risks may be materializing.”
— Nick Timiraos (@NickTimiraos) September 13, 2022
“We continue to believe markets underappreciate just how entrenched U.S. inflation has become and the magnitude of response that will likely be required from the Fed to dislodge it,” Nomura Securities report stated, according to Market Watch.
“We believe it is increasingly clear that a more aggressive path of interest-rate hikes will be needed to combat increasingly entrenched inflation stemming from an overheating labor market, unsustainably strong wage growth and higher inflation expectations.”
According to the report, Nomura forecasts that the Feds will raise the rate to 3.25-3.5% at the policy meeting on September 20-21, a shocking increase given that the rate was nearly zero as recently as March 2022. Nomura also believes that the Fed will eventually increase the rate to 4.75 percent in 2023.
Increasing the interest rate makes borrowing money more expensive. If the Fed increases the interest rate by 0.25%, the annual interest on every $10,000 borrowed will increase by $25. This rise is cumulative, particularly for variable-rate debt such as adjustable mortgage rates, auto loans, and credit cards.
According to a research evaluating data from TransUnion, the U.S. Federal Reserve, and the Bureau of Labor Statistics, Americans accumulated over $67 billion in new debt during the second quarter of 2022, average roughly $8,942 per family.
More on this story via The Republic Brief:
The data showed that this increase is 3.5 times more than the average debt taken on during the second quarter of the post-Great Recession.
Another problem is Democrats’ failure to save the expiring Obamacare subsidies would compound the issue for older Americans who could be forced to shoulder the burden of steep premium hikes. CONTINUE READING…
