The Impact of Inflation and Recession on Poverty and Low-Income Households
Despite being described as “transitory” in early 2021, inflation has remained high since, even reaching a four-decade high of 9.1% over the summer of 2022. The Federal Reserve began taking action in response, implementing several interest rate hikes. Those increases have helped steady the inflation rate; however, they also create consequences in borrowing capabilities that impact housing affordability, corporate growth and even unemployment. Some commentators point to a looming recession caused in part by those tradeoffs, while others say we are already in one.
While uncertainty remains, it’s clear that inflation and recession do not impact everyone equally.
To help us better understand the unbalanced impact, severity and what can be done to help, we reached out to three experts at the Center for Poverty and Inequality Research at UC Davis.