4 ms·
Not sure why you are being downvoted. That's essentially how things work. That's what FED and interest rates exist to do. Create and pop bubbles. As the FED r
by eighthnate 9y ago
Not sure why you are being downvoted. That's essentially how things work.
That's what FED and interest rates exist to do. Create and pop bubbles.
As the FED raises interest rates, money will start trickling out of "riskier" assets. The quicker the FED raises interest rates, the more quickly money will leave. Then we get a recession and when the FED feels they've sopped up enough money from the economy, then they will lower interest rates to get more money into the system, get more economic activity and re-inflate asset prices.