Tackling inflation could mean a recession: The Federal Reserve is using the only tool at its disposal to curb high prices caused by inflation. Continuously hiking interest rates should lower inflation, but it comes at the cost of slowing down the economy, which could mean a palpable recession.
Layoffs are expected: With the recent hikes, the Fed predicts unemployment to rise to 4.4 percent from the current 3.7 percent. That would mean a loss of 1.2 million jobs. Chairman Jerome Powell said the fight against inflation would lead to economic pain.
The global fight against inflation: Central banks across the globe followed the United States’ move by raising their interest rates too. In response, The World Bank published a report warning about a possible global recession in 2023. Other outlets agree with the possibility of a worldwide recession, citing the global manufacturing downturn amid the reliance on China and its disastrous zero-COVID policies.
The economic crisis will continue to get worse until it gets better.