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The decline of the labor market in the USA is causing adjustments to the Federal Reserve's interest rates.
According to BlockBeats, analysts note a rapid deterioration in the U.S. labor market. Recent revisions of data for May and June show a reduction of 258,000 jobs, which exceeds the population of Scottsdale, Arizona. To date, employment figures in the U.S. have been revised down by 461,000 positions this year, while several leading labor market indicators are showing signs of collapse.
This situation suggests that the Federal Reserve may lower interest rates to curb inflation. However, as inflation recovers, asset-less individuals may face issues similar to those experienced in the post-pandemic era. Wage growth is expected to lag behind inflation, potentially widening the wealth gap.
Historically, when the Federal Reserve lowered interest rates below 2%, the S&P 500 index increased by an average of 13.9% over the following 12 months. Asset owners may experience gains reminiscent of 2021.