I know they meet tomorrow and people are freaking out. Someone I know said it could be a catastrophic economic disaster based on their decisions. My question is…..what? I don’t get any of it at all. I’ve read articles and am trying to understand. What is a fed rate cut? How is that bad? What would it do? How would it cause an economic disaster? How would a rate cut lead to a recession?
Clearly, math and economics are not my strong suits and I want to be as informed as possible.
Thanks!
In: Economics
A fed rate cut is when the Federal Reserve lowers interest rates. This can make it easier for people to borrow money and stimulate spending, but it can also cause inflation. It’s not necessarily bad, but it can have consequences. A drastic rate cut could lead to a recession if the economy becomes too dependent on low interest rates.
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