Fed to Inflict More Pain on Economy as It Readies Big Rate Hike

Growth is already slowing in response to the Fed’s repeated interest rate increases, with the housing market softening, technology companies curbing hiring and unemployment claims edging up.

But with inflation proving persistent at a four-decade high, a growing number of analysts say it will take a recession -- and markedly higher joblessness -- to ease price pressures significantly. A Bloomberg survey of economists this month put the probability of a downturn over the next 12 months at 47.5%, up from 30% in June.

“We have to curb things domestically to help us get where we want to go on inflation,” said Bank of America chief US economist Michael Gapen, who’s forecast a mild recession starting in the second half of 2022.