Experts Suggest Banking Crisis Makes Recession More Likely

by YS Gold 

The Federal Reserve has raised interest rates by a quarter-point last week, on top of a steady rate hike over the last year. This is done in an attempt to roll back inflation, which raised prices. By raising interest rates, it becomes more expensive to borrow, and people spend less, which brings down prices. 

The recent crisis in the banking system has effectively had the same effect, economists say—because it likewise has the effect of slowing the economy, inching us closer to recession. 

Analysts at other financial institutions estimated that the issues in the banking system could diminish economic growth anywhere from half a percentage point to a full percentage point. They noted that recent events make it even more likely for us to see a recession next year. 

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