Federal Reserve Chairman Jerome Powell conceded that avoiding a recession will be difficult as the U.S. central bank hikes interest rates to tame inflation.
Thomas Hoenig, the former Kansas City Federal Reserve president, weighs in, arguing that a 'recession is a fair call.'acknowledged the U.S. central bank's war on inflation could force policymakers to raise interest rates so high they drag the U.S. economy into a recession.
While the central bank is hoping to orchestrate a soft landing – the sweet spot between taming consumer demand and inflation without crushing economic growth – Powell admitted the task was becoming increasingly difficult. "It is going to be very challenging," he said. "It has been made significantly more challenging by the events of the last few months – thinking there of the war and of commodities prices and further problems with supply chains."by 75 basis points for the first time since 1994, underscoring just how serious policymakers are about tackling the inflation crisis after a string of alarming economic reports. The move puts the key benchmark federal funds rate between 1.50% and 1.
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