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While inflation has moderated considerably since then, November's Consumer Price Index rose 2.7%, outpacing the Fed's goal of driving down inflation to a 2% annual rate.
1985–1989: The effects of Tax Reform Act of 1986, the elimination of Regulation Q which had capped interest rates banks were allowed to pay, imprudent lending during the late 1970s inflationary period, as well as other causes, [27] led to asset-liability mismatch for many Savings and Loans. [28]
Recessions. Many factors directly and indirectly serve as the causes of the Great Recession that started in 2008 with the US subprime mortgage crisis.The major causes of the initial subprime mortgage crisis and the following recession include lax lending standards contributing to the real-estate bubbles that have since burst; U.S. government housing policies; and limited regulation of non ...
One 2017 NBER study argued that real estate investors (i.e., those owning 2+ homes) were more to blame for the crisis than subprime borrowers: "The rise in mortgage defaults during the crisis was concentrated in the middle of the credit score distribution, and mostly attributable to real estate investors" and that "credit growth between 2001 ...
The nominal interest rate is a simple way of expressing the cost of a loan or the return on a deposit. The real interest rate accounts for the effect of inflation on the purchasing power of ...
One way to describe inflation is “too much money chasing too few goods.” If either the supply of goods increases or the amount of consumption declines, inflation tends to level out, or even ...
The equation is an approximation; however, the difference with the correct value is small as long as the interest rate and the inflation rate is low. The discrepancy becomes large if either the nominal interest rate or the inflation rate is high. The accurate equation can be expressed using periodic compounding as:
Chief among them is that inflation remains sticky: According to the Fed's preferred gauge, annual "core" inflation, which excludes the most volatile categories, was 2.8% in October.