what happens to interest rates during a recession

During a recession, interest rates typically fall as loan demand declines, bond prices rise, and the central bank eases monetary policy. The Federal Reserve usually lowers interest rates during a recession as a way to stimulate the economy. When a recession begins, the Federal Reserve might reduce the federal funds rate, which is the rate at which banks lend money to each other overnight, to kick-start economic growth. Lenders and banks usually adjust interest rates for loans when the federal funds rate drops, making loans and lines of credit less costly for borrowers. However, credit requirements are often strict during a recession, making it challenging for some borrowers to qualify for the best interest rates and loans. It is important to remember that interest rates are fluid during a recession, and rates at the beginning of a recession are not necessarily an indication of where rates will be at the end of the recession.