CNN - Breaking News, Latest News and Videos

Pretty much anyone who wants a job can have one. The economy is so hot that prices are surging faster than at any point since the 1980s. The housing market is on fire. Consumers are spending like crazy.

The truth is that we're probably not in recession now (although it's possible), but there are plenty of signs that one is around the corner.

Inflation has been rampant, and the Federal Reserve's tool to fight surging prices lies in its ability to set interest rates higher. That makes borrowing more expensive and slows the economy down — on purpose.

The problem is the Fed was super-duper late to raising rates. Inflation was a growing concern throughout 2021, but the central bank only began hiking rates in March 2022. So the Fed needs to play catchup — and take far more drastic action than it would if it had started raising rates last year.

Fed Chair Jerome Powell said this month the central bank would continue to raise rates by half a percentage point at the conclusion of each meeting until it's satisfied inflation is getting under control — and then the Fed would continue to raise rates by a quarter-point for a while.

Leave a Comment