Over the last 50 years, interest rates have risen before each recession and have fallen during and after each recession.

Question

Quizplus · Accepted Answer

This is commonly known as the business cycle. Interest rates tend to rise during periods of economic growth, which can lead to inflation. In order to slow down inflation, the central bank may raise interest rates. However, high interest rates can also slow down economic growth and lead to recession. During and after a recession, the central bank will typically lower interest rates to stimulate borrowing and spending, which can help to lift the economy out of recession. This pattern has held true for the past 50 years.

Over the Last 50 Years, Interest Rates Have Risen Before