The U.S. economy is heavily reliant on credit, which means that when borrowing costs become expensive, spending slows down, businesses struggle, and economic growth weakens. If a recession leads to widespread defaults, the Federal Reserve may take aggressive measures, including: • Lowering interest rates to near zero – to encourage borrowing and investment. • Implementing quantitative easing (QE) – buying bonds to inject liquidity into the market and stabilize financial conditions. In this case, government agencies and financial institutions (some of which have been criticized in the past) may play a key role in managing the crisis.