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We'll see in the next chapter that there was a stock market boom from the period of 1995 through the beginning of 2000. The boom came to an end in the beginning of 2000, causing the economy to slow down. GDP growth slowed down and was negative the first 3 quarters of 2001, unemployment rose and the National Bureau of Economic Research declared a recession in 2001. The Fed aggressively lowered interest rates to try to stimulate the economy. The table shows a decline in the T-bill rate by over 4 percentage points. This did not however, prevent a recession. The economy did pull out of the recession and inflation did not rise. The Fed kept the interest rate low in 2002 and 2003. The Fed was not worried about inflation, and was trying to stimulate a sluggishly growing economy. In 2003 II, the T-bill rate was 1.2 percent.
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