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People also say literally the opposite: that raising interest rates is what causes the recession. People even said that the fed was deliberately trying to induc
by UncleMeat 3y ago
People also say literally the opposite: that raising interest rates is what causes the recession. People even said that the fed was deliberately trying to induce a recession by raising rates. It cannot be both things, that both raising and lowering rates causes recessions.
Heck, isn't lowering rates what the fed does to juice the economy in the face of recession?
- hgomersall 3y agoIt's almost like they don't have a clue what's going on and their models are a waste of time.
- pas 3y agobut it can be, of course. overstimulation of the economy leads to unsustainable bubbles, which when burst lead to recessions, and an unexpected and unnecessary understimulation can very well cause a recession. (case in point in 2008 the Fed likely overreacted[0], because everyone was so scared of the insane housing prices, claiming there's no economical reason for them, whereas now it's clear that there are multiple serious factors cooperating to keep housing prices absurdly high.) [0] https://www.fullstackeconomics.com/p/the-2000s-housing-bubble-was-greatly-exaggerated https://www.fullstackeconomics.com/p/the-2000s-housing-bubbl...
- UncleMeat 3y agoI guess what I'd ask people who say "the recession is just around the corner, look at datapoint X" to also say what datapoint they'd use to determine that the recession is not just around the corner. Because it feels like the reasoning for why the recession is just around the corner simply fluidly moves between metrics as things change but the "just-around-the-corner-ness" never does.