For a decade now, the U.S. economy has been riding surging productivity and two giant bubbles: First, the tech bubble that went boom in 2000. Then the housing bubble that ballooned when the Federal Reserve took interest rates down to an astonishing 1 percent.
Now, housing has stalled out in more than half the country and many economists are asking if the party's over. Last week, the Fed laid off-- for the moment-- its long campaign of hiking interest rates to fight inflation. But no one's sure inflation is tamed.
More hikes and big job cuts may be in the offing. Maybe recession. There's even talk, for the first time in many years, of "stagflation" — the dreaded double whammy of recession and inflation.
Edmund Andrews, business reporter for The New York TImes
Lakshman Achuthan, managing director of the Economic Cycle Research Institute
Carl Tannenbaum, chief economist of LaSalle Bank Corporation
Robert Gordon, professor of economics at Northwestern University
Jack Beatty, On Point news analyst.
This program aired on August 16, 2006.