KBRA releases research contending that the U.S. economy is weakening as a result of mounting inflation-related headwinds, including those arising from the Federal Reserve’s aggressive catch-up in tightening financial conditions.
KBRA believes the central bank’s near singular focus over the near term on taming inflation runs the risk of overshooting its goal of curtailing demand, thereby increasing the risk of a hard landing. For credit spreads, which have held in close to long-term averages, the gravitational pull is wider into 2023. Important offsets to the effects of the slowdown are the strong balance sheets of consumers and businesses as well as the sound condition of the financial system.
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KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.
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van.hesser@kbra.com
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