Re:US Gross Domestic Product, Second Quarter 2022 (Advance E...
by dragonwriter on Thursday July 28, 2022 @02:27PM
(#32268359)
> Doesn’t a Fed typically lower rates during a recession?
Recessions have weak employment (that's one of the most important factors NBER looks at to determine recession, among the key reasons they have declared two of the last three recessions without two consecutive down GDP quarters, and one of the key reasons the present two consecutive down GDP quarters is arguably not a recession.)
The Fed dual mandate relates to price stability and full employment (it doesn't independently consider recession per se.) It typically lowers rates in a recession to nudge back toward full employment.
Employment remaining strong and inflation remaining high, thought, it raises rates, even if some people think it may be a recession.
Recessions have weak employment (that's one of the most important factors NBER looks at to determine recession, among the key reasons they have declared two of the last three recessions without two consecutive down GDP quarters, and one of the key reasons the present two consecutive down GDP quarters is arguably not a recession.)
The Fed dual mandate relates to price stability and full employment (it doesn't independently consider recession per se.) It typically lowers rates in a recession to nudge back toward full employment.
Employment remaining strong and inflation remaining high, thought, it raises rates, even if some people think it may be a recession.