Biden confuses debt with deficit, blames press for grim economic news and claims a budget ‘surplus’ in bizarre White House rantMortgage rates jump to 7.49%, keeping affordability out of reach for homebuyersHigher-for-longer interest rates will likely shave 0.5% from U.S. economic growth and may force unprofitable public companies to begin cutting their workforce, strategists at Goldman Sachs wrote in a note on Sunday.
An extended period of high rates will weigh heavily on the roughly 50% of publicly traded firms that were unprofitable in 2022, the firm warned. A wave of firms cutting costs through either reduced spending or declining headcount could create a 20,000 a month drag on payroll growth and slice 0.2% from GDP, the firm estimated.
The Federal Reserve’s current benchmark rate is not high enough currently to cause a recession, Goldman Sachs analysts wrote.Higher rates will also likely push the U.S. debt-to-GDP ratio from 96% to 123% over the next decade, the firm said.“We think it is unlikely that concern about debt sustainability will lead to a deficit reduction agreement anytime soon because of congressional gridlock, a lack of political attention to deficit reduction, and the upcoming 2024 election,” the firm wrote.
“And with neither of the likely presidential nominees focused on deficit reduction, it is unclear how much will change after the election.
Source: News Formal (newsformal.com)
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