Searcher

Published on Friday, June 24, 2022

Mexico | Will there be a recession in the United States?

Recessions occur because the Fed's short-term interest rates determine the level of all rates in the economy: the Fed's rate hike implies higher rates for credit to companies, for mortgage loans and for consumer loans, etc.

Key points

  • Key points:
  • At the end of last year, before the Fed began its cycle of increases, in the United States you could obtain a 30-year mortgage loan with an average fixed rate of 2.6%; today the equivalent rate is more than double (5.9%).
  • This of course will slow down the demand for new houses, which will reduce the pace of construction, reducing employment in that sector and consumption.
  • People will buy fewer durable goods as credit for their purchase has become more expensive, while companies will take on less debt and invest less.

Documents to download

Geographies

Topics

Has this information been useful?

New comment

Be the first one to add a comment.

Load more

You may also be interested in