NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — Creighton University economist Ernie Goss agrees with the general consensus that though they have paused the raising of short term interest rates for now, the Federal Reserve isn't going to stand pat for long.
"We're seeing some movements that look pretty good," Goss said. "We'll still see a rate hike. The Federal Reserve will still raise rates on the 26th of this month. Get ready for that. A little bit higher rates on the short end."
Are the rate hikes applying the brakes to the economy effectively? Goss is still waiting to see.
"They are supposed to slow the inflation down," Goss said. "Also intended, but not discussed, is slow the economy down. The economy is growing a bit too fast there. Job growth, a bit above what the Fed thinks is safe. Are they having that impact? They are, in terms of prices. Job growth, though, does continue to be pretty solid."
What should investors watch for as they look forward? It's another number from the Federal Reserve.
"When we had the bank failures, three bank failures, earlier this year, what the Fed did was came in there and bought bonds, which pushed money out into the economy. They stand ready to do that again. Keep your eye on that. The Fed stands ready to meet these emergencies that we're probably going to see."
In particular, large banks that are heavily leveraged in commercial real estate could have some struggles upcoming as they attempt to refinance what are often depreciating assets post-pandemic at higher fundamental interest rates.
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