We can all agree that 2022 was a very different business experience than we had previously experienced. After a decade of low interest rates, the Federal Reserve began increasing borrowing costs at unprecedented speed. We began 2022 with Prime Rate at 3.25% and ended the year with Prime Rate at 7.50%. This has been a shock to many parts of the economy such as new and used home sales, automobile purchases and has certainly begun to have an effect on new real estate and capital projects. As inflation really ramped up the Federal Reserve had to move to try to tamp it down by increasing rates.
Have they been successful? I don’t think we know yet. And while we have at least begun to see inflation increases moderate, no one really knows what it will take to get it back to acceptable inflation levels.
Throughout this, the job market remains firm, with unemployment at 3.7% and wage gains continuing. This has led to continued consumer spending and travel.
2023 will be another adventure in the business world. Let’s keep our eyes on the economic numbers, stay positive and stay strong.