04-28-2022, 02:33 PM
So GDP came out today and we went negative for this quarter. The projection was we would be slightly positive. If we have one more quarter of negative GDP, a second one following this one, then a recession is officially named of it. During a recession, interest rates generally fall to help the economy/stimulate it. However....
We have inflation right now. The highest in about 40 years. And the way to tackle inflation is to raise interest rates.
We are kind of stuck in no man's land. Do we want to stimulate the economy or do we need to tackle inflation. The forecast from bonds has been rate hikes are apparent and they have moved higher this year to support that. Bank rates on home loans have risen for example as a result.
I would say tackling inflation is more important and it's likely we will be in a recession by next quarter.
We have inflation right now. The highest in about 40 years. And the way to tackle inflation is to raise interest rates.
We are kind of stuck in no man's land. Do we want to stimulate the economy or do we need to tackle inflation. The forecast from bonds has been rate hikes are apparent and they have moved higher this year to support that. Bank rates on home loans have risen for example as a result.
I would say tackling inflation is more important and it's likely we will be in a recession by next quarter.
![[Image: 4CV0TeR.png]](https://i.imgur.com/4CV0TeR.png)
