By: Reese Yan
The economy, in many ways, is cyclic. Now, the U.S is in high inflation and could enter a Recession. Consumers have changed their spending habits and prioritized essentials, reducing unnecessary costs. Companies have changed their investment strategies because their costs were rising as profits fell.
The Federal Reserve raised rates this past week, trying to make it more difficult for people to borrow money and keep spending, aiming at slowing inflation and stabilizing the economy. So when people normally go to the bakery and buy a piece of cake, now they wouldn't. The rate rising for companies is a big red flag. Normally, companies would borrow money to pay off their employees, but they won’t anymore due to money. Companies will also reduce the number of positions available for workers.
Thomas Comb, a 52-year-old small business owner in Dallas, said he has changed howhe spends money when buying treats like gourmet coffee and ice cream. Comb said repairing his car has gotten more expensive, and he says he knows how hard it would be to upgrade his car or move to a different house. “I don’t like seeing corporations having record earnings the last couple of quarters then to be told of supply chain problems or refining or whatever is to blame for higher consumer prices,” Combs said. “You grow pessimistic but realize you have to roll with it if you want to survive in today’s America.”
With inflation and the rate rising, goods are getting expensive, and hiring people is getting more difficult. If things get even worse, we could have another great depression. Things will return to normal since oil has already been lowering its prices. But inflation is difficult to solve, so it will take a long time to end. So hopefully, everything will start improving.