Last week saw a surge in the markets following the conclusion of the Federal Reserve policy meeting. The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all reached new highs, resulting in significant gains for investors. Looking ahead, David Mericle, Goldman Sachs’ chief US economist, discussed the implications of the market rally and the potential for a recession. He highlighted the Fed’s stance on rate cuts and the likelihood of a June cut based on inflation data. Market uncertainty remains about the timing of the first rate hike, with three rounds of inflation reports ahead before June.
Goldman Sachs is forecasting a 15% chance of a recession over the next 12 months, down from 35% last year. This change is attributed to improvements in inflation expectations and labor market stability. Mericle emphasized that while there is always some risk of a recession, the reasons for concern seen in the past have diminished. The 15% recession risk is considered the baseline, with historical data supporting this level of probability. The focus is on avoiding unexpected events like the pandemic that could impact the economy.
The Federal Aviation Administration has increased oversight of United Airlines following safety incidents on recent flights. This oversight may impact the airline’s future plans, with projects potentially delayed based on findings from the evaluation. United informed employees of the increased FAA presence and emphasized the importance of safety compliance across various areas of operation. The evaluation comes after a United Boeing 737-800 incident in Medford, Oregon, where an external panel was missing upon landing.
As of May, over 23 million US households are at risk of losing internet access due to potential funding shortages for the Affordable Connectivity Program. This critical government program provides discounts on internet service for qualifying low-income households, but is expected to run out of funding by the end of April. Despite months of awareness, Congress has yet to approve the necessary $6 billion to renew the program, raising concerns about the impact on tens of millions of Americans. The FCC has started shutting down the program, halting new signups and warning users of potential benefit suspensions.
The looming internet access crisis could have significant consequences for millions of Americans, affecting their ability to work, learn, access healthcare services, and connect with essential public services. The lack of funding for the Affordable Connectivity Program highlights the widening digital divide and the potential economic instability that could result from widespread disruptions to internet access. With time running out for funding approval, the FCC’s actions to shut down the program signal the urgent need for congressional action to avoid a catastrophic situation for households across the country.
