A Wall Street Veteran Warns of More Rate Hikes and a Recession in the US
A seasoned Wall Street investor, Caitlin Long, is cautioning that the Federal Reserve’s battle with inflation is far from over. In an interview with Kitco News, Long predicts that the Fed will continue to raise interest rates, surprising many people.
Long’s prediction is based on her belief that inflation is resurfacing. She argues that inflation has increased in the short term, contradicting the consensus. This data suggests that the Fed will intensify its efforts to control inflation by raising rates.
While some sectors of the US economy are already experiencing a recession, Long points out that corporate America is benefiting from the rising interest rate environment. Many corporations have locked in low long-term interest rates and are earning significant returns by investing in Treasury bills and money market funds.
As the Fed continues to raise rates, Long warns that wealth inequality may worsen. The rich, who own these high-yielding Treasury bills, will become even richer while others struggle.
Hot Take: Wall Street Expert Warns of Impending Recession
According to Caitlin Long, a Wall Street veteran and CEO of Custodia Bank, the Federal Reserve’s fight against inflation is not yet over. She believes that the Fed will surprise people by further raising interest rates to combat inflation. While some sectors of the US economy are already experiencing a recession, large corporations are taking advantage of higher rates and getting richer. However, this trend exacerbates wealth inequality. As interest rates rise, it becomes more challenging for average Americans to accumulate wealth and escape debt. The warning from Long suggests that economic disparities may deepen as the US faces potential recessionary pressures.
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