In a rare and challenging situation, the US economy is currently facing unique challenges, according to Piper Sandler’s head economist. Large corporations are able to withstand or even benefit from higher interest rates, while consumers are feeling the financial strain. Nancy Lazar, Piper Sandler’s chief global economist, recently spoke to Fox Business Network about this bifurcated economy, where some are able to afford increased prices while others are being financially squeezed.
Lazar emphasized that a recession may be necessary to bring inflation under control. Large corporations have seen significant gains from high interest income, favorable financial conditions, stock market rallies, and government assistance. On the other hand, consumers are struggling with mounting debts, high interest rates, and inflation that erodes wage increases. Despite the potential for a recession, Lazar stated that it could be necessary to address the inflation problem. She worries more about persistent inflation than a recession and highlights the fine line that the economy is currently walking without taking action.