The Unease You Feel Is the Fed Pushing Into a Recession
There are increasing signs that inflation is abating, but the Fed seems determined to keep hiking despite the cost to the economy and jobs.
The Fed now risks making a hawkish mistake after last year’s dovish one.
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It seems as if it was just yesterday when critics of the Federal Reserve were attacking it for moving too late to rein in inflation. Now, with inflation at or close to four-decade highs, those critics look prescient — but the rhetoric is shifting to a tone of unease. Now, the fear is that the Fed might overtighten as it embarks on its fastest rate-hiking cycle since the early 1980s and effectively tip the US economy into a recession. Central bank officials now forecast that rates would reach 4.4% by the end of this year and 4.6% in 2023, a more hawkish shift in their so-called dot plot than anticipated.