In theory, lowering interest rates will increase consumption by the typical consumer and add an additional stimulus to the economy. This has typically been a monetary practice during times of economic hardship, but right now, the economy seems to be stable on the surface with low inflation, low unemployment, and overall growth. Do you think the Federal Reserve is gearing up for a recession in the near future?
I think they are making these decisions trying to sustain the growth that has been made. Yes the economy is due for a pull back but their job is to control how dramatic that needs to be. The only indicator pinting to recession is the inverted yield curve, everything else says healthy economy. Will be interesting to see what happens.
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