Economy Keeps Muddling Through with Wolf Richter

May 23, 2023

Wolf Richter summarizes that the economy is a mix of different sectors, with some doing well and some struggling. Consumers are still spending, but the banks are facing high interest rates and the commercial real estate sector is facing repurposing and foreclosure. The auto industry is seeing a decline in sales, but Tesla is still doing well.

Tesla is shaking up the auto industry by cutting prices and building production capacity in large amounts, forcing legacy automakers to compete on price. This is good for industrial America and consumers, but bad for automakers as sales of internal combustion engine vehicles are at levels not seen since the 1970s. Electric utilities are also benefiting from increased electricity sales.

Wolf and Kerry discussed the current state of the financial system, with Wolf noting that the economy is adjusting to higher interest rates and that banks are struggling with them. They also discussed the possibility of the Federal Reserve cutting rates and the potential impact it would have. Wolf concluded that the economy will muddle through and that it will be many more years before autonomous driving is widely available.

Sign up (on the right side) for the free weekly newsletter.