Economics
Fed Rush to Catch Up on Inflation Raises U.S. Recession Risks
- Ex-economic officials Lindsey, Summers see dangers of downturn
- Inflation pressures broader, more persistent than Fed expected
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The Federal Reserve faces a growing risk of making a policy mistake, tipping the economy into a recession, as it confronts decades-high inflation that’s proving more persistent and broad-based than policy makers expected.
After holding interest rates near zero since the start of the pandemic, Fed Chair Jerome Powell and his colleagues are poised to embark on a credit-tightening campaign next month, with some economists forecasting an outsized half percentage-point increase to start the cycle.