NASSAU, BAHAMAS — Fed’s decision to raise interest rates to counter inflation surges last week could disrupt the country’s economic recovery, a well-known financial executive warned yesterday. However, US consumer spending could impact the country’s number one industry segment.
Last week, the Federal Reserve raised interest rates by three-quarters percentage points. This is the highest level since 1994 as the country continues to tackle high inflation. Rising interest rates are seen as a tool for increasing borrowing costs, which leads to lower spending, resulting in lower demand and ultimately lower prices for commodities.
Gowon Bowe, CEO of Fidelity Bank (Bahamas), told Eyewitness News that the move will have a “significant impact” and will add market strategies at this point to understand the target market. Was important.
“”Traditionally, the Bahamas was at the high end of the tourism market with people with high disposable income, “he said...
“The impact of rising US interest rates and the potential impact of a recession certainly carries the risk of disrupting some of our rebounds, but this is a major concern.
Bowe goes on to say: We are usually aimed at people who can take a two-week vacation and want to shrink a bit to handle some priorities, but still have disposable income.
“Because the United States is the main provider of tourists to our destinations, rising interest rates on more expensive consumer borrowing will increase disposable income, length of stay, and willingness to spend on airfare. Affects. Perhaps these jurisdictions targeting bargain basement shoppers will probably have an even greater impact. “
According to Bowe, the drop-in segment may not be significantly affected, but the cruise segment, which usually attracts vacationers looking for bargains and deals, may be more affected.
“We need to be prepared for it and do our best to maintain the headwinds that come with it,” he added.
https://ewnews.com/knock-on-effect-us-federal-reserve-interest-rates-hike-effect-could-disrupt-countrys-economic-rebound?utm_source=rss&utm_medium=rss&utm_campaign=knock-on-effect-us-federal-reserve-interest-rates-hike-effect-could-disrupt-countrys-economic-rebound The effect of the US Federal Reserve’s rate hike could disrupt a country’s economic recovery – Eye Witness News