Fed Rate Hikes Threaten 'Goldilocks' Economy as Higher Borrowing Costs Squeeze Consumers and Companies

Wall Street's dream of a Goldilocks economy is dead as higher interest rates threaten consumers and squeeze company profits.

The Fed's insistence on higher rates for longer has sparked a surge in bond yields and rattled stock investors.

With interest rates at 2007 levels, something in the fragile economy could break as consumers face limits.

Company bankruptcies are rising as the cost of capital soars, threatening a recession as early as late 2022.

For a soft landing, the Fed must pause hikes as inflation falls, but more hikes could trigger a recession and goodbye to Goldilocks.