One way the U.S. economy can be adversely affected when interest rates are lowered is through the risk of excessive economic growth leading to inflation. Lower interest rates reduce borrowing costs, encouraging more borrowing and investing, which can stimulate economic growth. However, if rates are too low for too long, this can spur excessive growth and trigger inflation, which reduces consumers' purchasing power and undermines the sustainability of the economic expansion
. Additionally, prolonged low interest rates may lead to economic distortions, such as asset bubbles and excessive risk-taking in financial markets, which can harm long-term economic health
. There is also a risk that lowering rates too much or too quickly could initially increase the risk of recession before benefits are realized
. In summary, while lower interest rates aim to stimulate the economy, one adverse effect is that they can cause inflation and financial imbalances that weaken economic stability over time
