Part 7/12:
Historically, recessions have been manageable with tools like interest rate cuts and quantitative easing, which stimulate economic activity. But today's scenario is different: the economy is slowing, yet inflation remains high.
If the Fed tries to stimulate the economy during a period of inflation, it risks fueling price increases further. On the other hand, continued rate hikes to bring inflation down could deepen economic pain, leading to higher unemployment and lower asset values.