Recession Fears Rise Despite Strong Economy

Despite strong job growth under the Biden administration, recent economic data has sparked recession fears. Although the economy is not currently in a recession by the formal definition, an increase in the unemployment rate has triggered the "Sahm Rule," a historically accurate recession predictor. While some economists, including the rule`s creator, believe this time is different, investors are reacting with concern, driving down stock prices. The Federal Reserve`s efforts to control inflation by raising interest rates may now be contributing to a faster economic slowdown, raising the possibility of a "hard landing" and increasing the likelihood of rate cuts in the near future. The central question is whether the Fed`s actions will be enough to avert a recession or if they will inadvertently cause one.