ge rates. In fact, when short-term interest rates are hiked, sales of new automobiles and new housing starts often experience a decline. For example, the U.S. auto industry has always experienced a decline in automobile sales after a hike in the U.S. short-term interest rate. Hikes in interest rates can set off recessions, typically periods where consumers postpone long-term expensive purchases like automobiles and housing. Interest rates are often responsible for the cyclical nature of the U.S. economy and the cyclical nature of the economies of various industries, like the auto industry “The auto industry knows that during a recess
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