ETFs to Buy as Soft Landing Odds Improve
The market is divided between views on the true health of the U.S. economy. Mostly, investors are becoming more certain that the economy will avoid a recession in 2023. However, some remain skeptical about whether the economy can avoid a recession next year.
Inflation levels have shown a consistent decline in recent months, but remain above the Fed's benchmark level. Coupled with the potential for future Fed rate hikes in 2023, these factors contribute to an atmosphere of uncertainty surrounding the state of the economy.
Difficult Economic Conditions
According to Forbes, the Fed's recent projections suggest that a recession in 2023 is unlikely. However, the extended rate hike approach adopted by the Fed might hinder economic growth. Even if the United States manages to evade a recession in 2023, the forceful monetary policy pursued by the Fed over the past 18 months could now be causing adverse effects on the economy.
Moreover, the banking crisis has led to tight credit conditions, and historically high interest rates are placing pressure on corporate profits and overall economic expansion.