And that, the research paper concludes, is just what has happened in previous periods of high inflation. The researchers reviewed 16 episodes since 1950 when a central bank like the Fed raised the cost of borrowing to fight inflation, in the United States, Canada, Germany and the United Kingdom. In each case, a recession resulted.
The perception that the central bank will need to keep raising borrowing costs was reinforced by a government report Friday that the Fed's preferred inflation gauge accelerated in January after several months of declines. Prices jumped 0.6% from December to January, the biggest monthly increase since June.
Those differences, he said, are the"unprecedented" disruption to supply chains since the pandemic; the decline in the number of people working or looking for work; the fact that the Fed has more credibility as an inflation-fighter than in the 1970s; and the fact that the Fed has moved forcefully to fight inflation with eight rate hikes in the past year.
Another speaker, Susan Collins, president of the Boston Fed, held out hope that a recession could be avoided even as the Fed seeks to conquer inflation with higher rates. Collins said she's"optimistic there is a path to restoring price stability without a significant downturn." She added, though, that she's"well-aware of the many risks and uncertainties" now surrounding the economy.
Those trends raise the possibility that the Fed's policymakers will decide they must raise rates further than they've previously projected and keep them higher for longer to try to bring inflation down to their 2% target. Doing so would make a recession later this year more likely. Prices rose 5% in January from a year earlier, according to the Fed's preferred measure.Using the historical data, the authors project that if the Fed raises its benchmark rate to between 5.2% and 5.
Stop doing that! They are going to make things so much worse & harder.
No shit
Biden, the failed President brought us the worst inflation in 40 years. We pay more for everything we buy, our retirement accounts are devastated, while Biden brags that he is doing more to help us than any President in history. With the media's support he gaslights nonstop.
We are already in a recession thanks to Biden/Harris
Cooling the economy means putting working class folks out of work
Greenspan was fond of 7% unemployment
Wonder what went wrong these past 2 years 🤔
Recession? What recession? Canadian employers ‘desperate for workers’ as hiring growth expected to continue. Non-Canadians on work permits are streaming into jobs and employers still have huge vacancies to fill.
Never trust a woman with a bowl cut
❤❤❤❤
The Fed explaining to the poor why they are in for more suffering.
The Fed creates inflation.
Stop with the fear mongering
Interest rate increases won't address the historic corporate gouging. 54 cents of every inflation dollar is corporate profits. Seems only Democrat Senators are addressing this issue but getting no help from the other side, of course. My point is the fed ignores it.
Yes, but what you're leaving out is that the Fed is printing money, which is what largely drives inflation . Then, they put out their self-made fire by raising interest rates
The goal is to keep everyday Americans in a constant debt cycle forever worried about buying at higher rates they cannot afford while the government rubs its hands together waiting for missed property tax payments.
You mean what they typically did in the 20th century?
But in this case Democrats keep thwarting it by dumping more cash in as 'inflation relief' which defeats the entire purpose and adds more inflationary fuel.
Why do you think Bush's Great Depression isn't in full gear now?
Been in a recession for months
I doubt it!!!
Fed is Doing it's Best. Keep Going.
How about we reduce congress paychecks to make up the difference instead?
The answer is NO.
Talk about that 33.2 trillion debt
No
No
Not if the government keeps spending money like drunken sailors! The Inflation Act on top of the Infrastructure Bill will make it difficult for the Fed to control inflation!
Biden's regime has caused a huge deficit, and his policies are causing many businesses to shut down or letting employees go as Biden keeps spending billions to support his proxy war instead of promoting peace .
… But, but, they said it was transitory? So they lied?