Weak Credit Growth May Force The Fed To Cut Rates
Posted April 26, 2024
Total Credit in the United States first exceeded $1 trillion in 1964.
This quarter it will blow past $100 trillion.
This 100-fold increase in Credit over the last 60 years has been the most important driver of global economic growth.
Credit Growth now drives Economic Growth.
Capitalism has evolved into Creditism.
When Credit Growth is strong, so is Economic Growth. When Credit Growth is weak, so is the Economy. If Credit contracts, the Economy will spiral into a Depression.
These facts are the starting point for understanding economics in the 21st Century.
For this reason, Macro Watch tracks Credit Growth carefully.
This week’s Macro Watch video analyzes the most recent trends in Credit Growth and discusses what those trends suggest about the outlook for economic growth.
It shows that Credit Growth has been slowing sharply.
Although US economic growth has remained strong so far, the Fed must be concerned that if interest rates remain high, Credit Growth will slow further and tip the US into Recession.
This concern may force the Fed to begin cutting the Federal Funds Rate soon even if Inflation remains above the Fed’s 2% target.
For all the details, Macro Watch subscribers can log in and watch this video now.
This video is 16 minutes long and contains 40 slides that can be downloaded.
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Finally, CLICK HERE and scroll down to see a list of the many other Macro Watch videos explaining Credit and Creditism.
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