The Fed knows its actions could trigger a recession
As the US Federal Reserve fights to curb inflation with higher interest rates, it’s aware that making borrowing more expensive right now could tip the US into a recession.
“It’s certainly a possibility,” said Fed chair Jerome Powell in his testimony today before the Senate Banking Committee. “It’s not our intended outcome at all. … Frankly, the events of the last few months around the world have made it more difficult for us to achieve what we want, which is 2% inflation and still a strong labor market.”