Citigroup economists: Fed concerns about whether the economy is starting to weaken faster could accelerate rate cuts

Odaily News In the year since the Federal Reserve raised interest rates to a more than 20-year high, it has successfully cooled an overheated U.S. economy. But higher borrowing costs have also had some unexpected effects. High-income households are benefiting from rising stock and home prices. Businesses are borrowing quickly and consumers are continuing to spend. But in other areas, a year of high interest rates is finally starting to take its toll. Americans are taking longer to find jobs, and the unemployment rate has risen. Small businesses are feeling the pain of higher borrowing costs. Low-income families are defaulting on auto loans and credit cards. "The economy has softened in the past few months, and Fed officials will be very concerned about whether the economy starts to soften faster," said Veronica Clark, an economist at Citigroup. "That will lead officials to cut interest rates more quickly." (Jin Shi)