A recession is where an economy that had previously been growing slows down. The level of production declines, unemployment rises and consumer spending dries up - in the worst case scenarios, as happened in the depressions of the 1930s and the 1980s, so few people are spending money that businesses sack staff to cut costs. No, but Alan Greenspan, who controls American monetary policy, is worried that it might. To this end he has cut US interest rates. Those who don't are more likely to take out loans.
Businesses are able to expand with cheap loans, too, and create more jobs.
Mr Greenspan again. For the last two years he has been more concerned about inflation, which can spiral out of control when borrowing is cheap. Unable to predict the rate at which prices rise, wage demands go up beyond the rate of inflation and businesses, now incurring greater running costs, pass on their wage bill to the consumer by putting up the prices of their goods - raising inflation. The US federal reserve, of which Mr Greenspan is the chairman, adjusts its interest rate to maintain healthy economic growth. More importantly in the context of a potential recession it tries to put an end to the cycle of boom and bust, which Mr Greenspan has probably seen enough of for one lifetime.