Imports deduct from GDP and exports add to the figure. In recent years, the U. S. has consistently experienced net imports, with imports exceeding exports. Rapid economic expansion, growth in excess of the average sustainable rate, is generally short-lived, as it can lead to inflation and, in turn, cause the Federal Reserve to tighten monetary policy in order to slow growth. An economic downturn, or negative growth, is known as a recession. During a recession, the Fed may lower interest rates to stimulate the economy and increase the growth rate.
Bad news is good news for the bond market.
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