The Bifurcated Economy: Recession and Boom

The podcast discusses the current state of the US economy, highlighting a sharp contrast between different sectors. While the housing and commercial real estate markets are experiencing a deep recession, the service sector is booming. The housing market is facing a decrease in demand due to the dramatic increase in interest rates, making it difficult for many people to afford mortgages. As a result, housing transactions have decreased significantly. On the other hand, the service sector is thriving as a result of massive fiscal stimulus and pent-up demand from COVID lockdowns. The injection of money into the economy has led to increased spending in the service sector, causing inflation. This divergence in economic performance raises questions about the possibility of a traditional recession and the ability of the Federal Reserve to maintain high interest rates in the long term.