Fed Chair Jerome Powell Concedes Possibility That Higher Rates Cause a Recession – WSJ

Federal Reserve Chairman Jerome Powell said the central bank s battle against inflation could lead it to raise interest rates high enough to cause an economic downturn.

It s certainly a possibility, Mr. Powell said Wednesday during the first of two days of congressional hearings. We are not trying to provoke and do not think we will need to provoke a recession, but we do think it s absolutely essential to bring down inflation, which is running at a 40-year high.

His remarks underscore the challenge facing the central bank as it raises interest rates at the most rapid clip since the 1980s to slow the economy and cool inflation.

via www.wsj.com

The hard money types I listen to on YouTube are saying the Fed is about to reverse course, in spite of all this tough talk. More troubling is the inversion of the Euromoney yield curve, which seems to mean that this enormous, smart market thinks that we’re on the verge of a financial breakdown of some sort, followed by (perhaps?) the Fed reversing itself. See Jeff Snyder on this.