Re:U.S. Treasury Yield Curve Inverts for First Time Since 2007
by phkahler on Monday March 25, 2019 @09:45AM
(#19482330)
I don't have the quote, but Alan Greenspan actually said the rapid lowering and raising of rates was part of the trigger. The financial environment was also not good, but they set it off:
Note the massive drop (stimulus) in the early 2000s. That pushed debt levels up and encouraged the crappy loans and all that. Then the rapid increase set it off. Home prices vary inversely with interest rates, so raising them rapidly cooled the market and put all that cheap debt under water.
https://en.wikipedia.org/wiki/Federal_funds_rate#/media/File...
Note the massive drop (stimulus) in the early 2000s. That pushed debt levels up and encouraged the crappy loans and all that. Then the rapid increase set it off. Home prices vary inversely with interest rates, so raising them rapidly cooled the market and put all that cheap debt under water.