Are we headed for a recession? Nashville experts step in
NASHVILLE, Tenn. (WTVF) – As the Federal Reserve raised interest rates 0.75% on Wednesday, many are wondering if we’re heading into a recession that could force more Tennesseans out of work.
Andy Borchers of Lipscomb University College of Business says the previous interest rate hike in June has already cooled the economy somewhat.
“For example, with rising mortgage rates, some housing markets are starting to cool down,” Borchers said.
While many suspect the US may already be in a recession, it’s not official yet – with just one quarter of negative economic growth, instead of the required two, but that data is lagging.
But experts say if we head in that direction, it might not be so bad in Middle Tennessee.
“The fact that labor markets are still very strong right now is a positive indication that even if there is a recession, it may be relatively modest,” Borchers said.
Meanwhile, higher interest rates mean it will be more expensive to borrow money, which means you’ll pay more on your credit cards if you have a balance.
The Greater Nashville Realtors group says the higher rates have pushed down the number of home closings, meaning buyers can now have more time to negotiate things like repairs and closing costs.
“I think it’s healthy for the market to move from a strong seller’s market to a more balanced market where neither buyers nor sellers have the upper hand,” said Steve Jolly of Greater Nashville Realtors.
That may at least be a benefit during this hot summer, as our economy’s cooling systems still seem to be working hard.