Rising rates are having a disproportionate effect on the San Joaquin Valley economy, according to the newest Valley Business Forecast report produced by Gökçe Soydemir, the Foster Farms endowed professor of business economics at Stanislaus State.
“We stated in our previous report that the severity of the recession would depend on how fast and how high the Federal Reserve increased interest rates. It takes time for rate hikes to influence the economy, and concerns are mounting that the Federal Reserve is raising rates too quickly without waiting to see the effect on the economy,” stated Soydemir.
He says that the yield curve on the two-year versus 10-year bond yields inverted a few times beginning in late March is a predictor of a recession.
“Now there are increased worries that the rate hikes by the Federal Reserve to bring down inflation will steer the economy into a hard landing,” Soydemir said.
Soydemir offers…
