 TITLE: What Happens to Interest Rates During a Recession? CONTENT: How Do Recessions Affect Interest Rates?\n----------------------------------------\nInterest rates tend to go down during a recession as governments take action to mitigate the decline in the economy and stimulate growth.\nIt can take several months to get all the data needed to determine when a recession starts, but the U.S. Federal Reserve cut its target interest rate in mid-March 2020 in response to the coronavirus outbreak's economic impact.\nLow interest rates can stimulate growth by making it cheaper to borrow money, and less advantageous to save it. As a result, companies may borrow to invest in their business and individuals may look for ways to take advantage of low rates. For example, more people may be tempted to buy a new car with a low-rate auto loan, and the increased demand supports the activity that goes into manufacturing and selling the car.\nHowever, you may find it's difficult to get approved for a loan during a recession, as creditors also become cautious about lending money. They may increase minimum credit score requirements, require higher down payments or even stop offering certain types of loans altogether. END