Banks are warning US President Donald Trump not to rush to slash credit standards as the US Federal Reserve prepares to boost its benchmark rate this week.

“I think that we are going to see the US government start to slow down its rate increase, and I think it will be slow and steady over the next few months,” Scott Bardsley, chief economist at the U.S. Bankruptcy Institute, told Fox News on Wednesday.

Bardsley said there was a “greater risk” that Congress could “punch through” the Fed’s December 1 rate hike to a halt, and he said that if the economy was strong enough for that to happen, then “there would be some benefit to the US”.

“If we had that kind of strong economy, and if the Fed starts to slow things down, and you have a little bit of slack in the economy, then it could make a difference to how the economy responds to the Fed,” he said.

The Federal Reserve raised its benchmark interest rate on Wednesday, the second-highest in the world and its first rate increase since February 2014.

The bank has been reluctant to lift rates because it has not seen inflation or unemployment rise in more than a decade.

Banks are concerned that the rate hike could prompt some of the nation’s biggest companies to cut jobs, while the fallout from the economic downturn could be “a big drag on the economy”, Bardske said.

Bardheson said a recent report by Goldman Sachs showed the impact of a large rate hike on businesses, including those that employ many of the roughly 1 million people employed by the banking sector.

“A lot of banks are thinking about how they’re going to handle that,” he added.

“Some of them are looking at their risk profile, and what that looks like going forward.”

He added that the bank had a “very positive view” of the economy and of the job market.

“But we’re still very concerned that there’s a greater risk of a slowdown in the job recovery,” he told Fox.

Bardingley said that while the impact on banks would be limited, it was “quite possible” that some businesses could suffer because of the impact.

“If a company has a very large number of people who have been laid off and are looking for work, it could be quite difficult to find a job that will pay more than the cost of the layoff,” he noted.

“That’s a real concern.

If you have one million people that are laid off, and one of those people loses their job, they’re not going to be able to find work.”

Bardson said that the “biggest concern” banks are having is that their ability to pay employees would become more constrained, as they would have to raise rates, as the Fed is expected to cut its benchmark.

“The biggest concern is that if you are in the banking business, you’re going through a lot of stress,” he observed.

Bars have also been taking a wait-and-see approach to the prospect of a rate increase.

“They’re worried about it because they know it’s a little premature.

They know they need to do a better job of predicting what’s going to happen in the market, and it’s going do a lot more to hurt the economy than help it,” Bardson told Fox, citing some of his bank’s past clients.”

And the banks are worried about that.”

However, Bards, who has worked at the bank for nearly a decade, said that “they have been very careful” in their forecasts.

“It’s a very good thing to hear the governor’s optimistic comments about the economy.

They are very optimistic,” he concluded.”

We’ll see where things go, and we’ll see how the Fed will respond to that, but I think we’re going see a lot slower rates than we would have expected a year ago.”

Topics:business-economics-and/or-finance,business-news,money-and-$100,economy,industry,jobs,government-and.debt,interest-and_rates,foreign-affairs,aUSTRALIA,united-statesFirst posted February 14, 2021 09:34:02Contact Brett A. GardnerMore stories from Australia