There are red flags popping up all around the economy, and more signs that America is heading towards a recession in the next couple years, if not sooner. The housing market is showing signs of weakness, GDP growth is not what Trump and Republicans predicted, and the tax cuts meant little to the real economy because it was not coupled with cuts to government spending.
The Federal Reserve is raising interest rates to try to fight off inflation, but as it does that, markets are tightening. This is all due to backwards Keynesian economics, which put the focus of the economy on aggregate demand, instead of supply. Savings, investment, and production fuel economic growth, not spending, debt, and consumption.
Unfortunately, some people are already looking to blame the Federal Reserve. The crash won’t be caused by the Fed raising rates though. It was caused when the Fed kept rates at record lows for nearly a decade, allowing an enormous bubble to grow. The air is starting to come out.
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