The American economy is one of the largest in the world by most measures – and as a result, it’s a dynamic and ever-changing environment. One person’s experience of it is not the same as any other person’s – and a blue-collar worker in Iowa is likely to have a very different perception of the economy from an entrepreneur in Texas.
However, there are some overarching trends, such as the move towards tariffs and the implied continuation of low interest rates, that will affect everyone. This article will delve into these trends and explore what they could mean for you.
In recent months, there have been suggestions made that the Federal Reserve may be about to hike interest rates. While the exact consequences of high interest rates on personal finance can differ from person to person depending on your own circumstances, one thing is for certain: low interest rates are often what fuels economic growth, as it makes it easier for risk-takers and entrepreneurs to get the loans that they need to kick-start their businesses and create stable American jobs. For those who are looking to buy a home, low rates can make all the difference between getting a mortgage and not getting one – so they’re vital for empowering people to take control of their living and housing situations.
When asked about the issue, President Trump was clear. He said that “they should drop rates and get rid of quantitative tightening. You would see a rocket ship.” There was some suggestion that the Fed would seek to raise rates over the course of this year. In recent months, however, the Federal Reserve appears to have indicated that rate rises are not on the immediate agenda – giving some hope to those who want to have access to cheap debt for some time to come.
The stock market
Investing speculatively has more than a century of heritage in the US. To some degree, the performance of the economy doesn’t always have a profound effect on the investment markets. Even after the 2008-9 financial crash, stock portfolios were able to recover once they had had some time for the market to build back up again, meaning that total wipeout was avoided for some. The stock market has been performing relatively well recently: in fact, it was revealed just this week that not only had the S&P 500 reached 2933.68 points, which was a record, but the Nasdaq also broke its record of 8,110.
However, nothing is ever guaranteed in this industry – and there’s a sense among some people that a stock market correction could be about to happen and that the current highs are simply evidence of a bubble occurring. With that in mind, looking down the Goldstone Financial Group Twitter page and considering investment products that are right for your preferred risk level is a sensible way to ensure that you have a diverse portfolio.
Tariffs and trade barriers
The US economy has taken a concerted turn towards tariffs in recent times. For many years, tariffs were considered anathema to the dominant free trade agenda. However, the administration is currently exploring avenues towards supporting American manufacturers. By making imports from countries that compete with the US more expensive, American goods are often much better-priced – leading to cash savings for American consumers.
Currently, there are tariffs in place on a range of goods imported from nations such as China. If you’re an American manufacturer or you work in this sector, then, it’s not out of the question that you’ll benefit from this. As ever, though, the economy can change – and talks between China and the US may reach some sort of resolution to the tariff question at some point soon. However, the long-term political trend appears to be more and more in favor of American manufacturers, which is good news for those in industry.
The American economy is a large beast that can affect different people in different ways, and it can create winners and losers on even the same day. However, political and wider international forces have combined to create an economy where hardworking American businesses and individuals can use debt, the stock market and more to their advantage. Over time, this is likely to have a knock-on effect and boost prosperity and riches for the masses.