CFO2302. Economic Update

By the time of the conference, the FOMC will likely have raised policy rates another 50 basis points, lifting the fed funds target range to 5.00%-to-5.25%, just a bit below the level hit before the Great Recession in 2007. Meantime, despite some early-year economic momentum, the cumulative impact of 500 basis points worth of tightening should be coming home to roost. At least a mild recession seems likely.

Learning Objectives:

• Identify why inflation is being stubborn and forcing the Fed’s hand. This will help participants better assess the risk of even more rate hikes.
• Analyze why in the face of aggressive Fed tightening, the economy still has offsetting growth supports. This will help participants better assess the risk of a deeper economic downturn.