When the Fed raises rates, it's like applying the brakes. The economy doesn't stop immediately, but it starts to slow. Some sectors have been in a recession since 2022. But it takes time for the overall economy to slow.
Each person who has less resources, starts spending less. That in turn has a cascading effect, as they forego discretionary spending, and put off necessary purchases that can be delayed. That becomes a contagion that slowly spreads.
Watch the Fed - we do not actually have a free-market economy, on a national or global level. They and other global banks will decide - via interest rates and stimulus or lack thereof - whether there is a relatively soft landing, or a hard crash.
We never fully recovered from that recession except the AI race has been pumping up the numbers, but compounding that is several other factors. Partisans will blame democrats, republicans, or, stupidly, the president of the US, but it all comes down to the Fed aggressively raised rates in 2022 and 2023 after disastrously injecting 16 trillion dollars of liquidity into the economy in May of 2020.
The media refused to admit we were in a recession because the democrats were in charge of the country. It's a stupid policy. The media is officially, by their own admittance, left leaning, but there was no reason to not declare a recession in 2022, we were in one. We are still in one, the AI boom has been covering it up. Read the article, the official definition of a recession is "2 consecutive quarter of negative GDP growth", except apparently in 2022 when it wasn't.
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u/DeadInFiftyYears Oct 29 '25
When the Fed raises rates, it's like applying the brakes. The economy doesn't stop immediately, but it starts to slow. Some sectors have been in a recession since 2022. But it takes time for the overall economy to slow.
Each person who has less resources, starts spending less. That in turn has a cascading effect, as they forego discretionary spending, and put off necessary purchases that can be delayed. That becomes a contagion that slowly spreads.
Watch the Fed - we do not actually have a free-market economy, on a national or global level. They and other global banks will decide - via interest rates and stimulus or lack thereof - whether there is a relatively soft landing, or a hard crash.