The Federal Reserve pushed up the odds that the country will fall into a recession on Wednesday when it tightened up the flow of money in the most aggressive move in 22 years. KevinTDugan reports
Jerome Powell speaks at a news conference following the interest-rate hike. Photo: Win McNamee/Getty Images The Federal Reserve pushed up the odds that the country will fall into a recession on Wednesday when it tightened up the flow of money in the most aggressive move in 22 years.
The Fed’s mandate is to keep inflation low and employment high — two goals that are especially at odds now. Earlier this week, the Labor Department recorded the highest level of job openings ever for March: 11.5 million, more than double the number of people who are unemployed. On top of that, 4.5 million people quit their jobs that month, another all-time high. This has had the effect of pushing up wages, though not enough to keep up with inflation.
As far as central banks go, the Fed’s regime of rate hikes is an outlier. Inflation isn’t just a problem in the U.S., after all. The European Central Bank has kept its interest rates negative and will consider buying up even more debt if the E.U. enters a recession, which is increasingly likely. China is expected to go in a similar direction, even as it grapples with a teetering real-estate bubble and manufacturing shutdowns.
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