Could We face a Future Boom and Bust?

Readers Question: A Few years back when US cut interest rates drastically to recover the economy from dot com bust, it leads to a boom in the housing market and created another bust. Currently US has cut the interest rates again drastically to 1%, wouldn’t it create another boom and bust?
Thank you.

I think it’s an excellent question. Although, at the moment we are focused on the impact of a serious recession. It is important that we learn from the mistakes of the past decade to avoid a future asset price boom and bust.

With output falling and unemployment rising, an economic boom seems hard to imagine, nevertheless, there is a possibility that the mistakes of the past decade could reoccur in the future.

I answered question here: – Forecasts for US economy – Could Boom and Bust return?