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What happens to the federal funds rate when there is a recession?

User Davit Tovmasyan
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During a recession, the federal funds rate is typically lowered in order to stimulate economic growth and encourage borrowing and spending. When the federal funds rate is lowered, it becomes less expensive for banks to borrow money from the Federal Reserve, which can then be lent to consumers and businesses at lower interest rates. This can help stimulate economic activity and potentially lead to an economic recovery. However, the exact response of the federal funds rate to a recession will depend on a variety of factors, including the severity of the recession and the specific policies implemented by the Federal Reserve.

User Ryan Elkins
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