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Central Banks

Powell Signals Recession May Be Price to Pay for Crushing Inflation

  • Fed raises rates 75 basis points, signals more hikes to come
  • ‘No one knows’ if this will lead to a recession, Powell says
Bloomberg business news
WATCH: Federal Reserve Chairman Jerome Powell speaks about the decision to raise its benchmark interest rate by three-quarters of a percentage point.Source: Bloomberg
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Federal Reserve officials gave their clearest signal yet that they’re willing to tolerate a recession as the necessary trade-off for regaining control of inflation.

Policy makers, criticized for being too late to realize the scale of the US inflation problem, are moving aggressively to catch up. They raised interest rates by 75 basis points on Wednesday for the third time in a row and forecast a further 1.25 percentage points of tightening before year end.