9 August 2023
Businesses are hitting the panic button due to looming recession fears and dwindling profit margins. As banks, both big and small, tighten lending standards, the economy is starting to falter. The surge in yields has already led to the downfall of Silicon Valley Bank (SVB). This cautionary atmosphere among banks and the subsequent economic slowdown means corporations, anxious about falling profits, are halting their expansion plans. The cycle is self-perpetuating and we’re currently witnessing its damaging effects. The Inflation Reduction Act’s temporary relief, thanks to its hefty subsidies, is on the verge of dissipating. With a decreasing demand for loans, hopes of a smooth Landing may well end up being quite the opposite.