While record inflation and interest rates point to a possible economic downturn, employers are still questioning if they will see a recession in 2023 — but the answer is not a simple yes or no.
In an effort to combat inflation, the Federal Reserve has brought interest rates to a 15-year high, raising the target range between 4.25% and 4.5%. There likely will be no reductions until 2024. Meanwhile, it will be more expensive for businesses to borrow money through loans and lines of credit, while credit card debt, car payments and mortgages will become harder to pay off for everyday consumers. The Fed hopes this lowers overall demand and spending, reducing the supply of money in circulation, which in turn usually lowers inflation rates.
