Recession odds increasing as Fed struggles with explosive inflation

Published August 2, 2022 12:00am ET



The odds of the economy falling into a recession have risen over the past several months as inflation remains stubbornly high and the Federal Reserve is forced to hike rates.

June’s consumer price index report came in hotter than expected and showed prices increased by 9.1% on an annual basis, the fastest clip since 1981 during the Great Inflation that helped sweep President Ronald Reagan into office. That in turn has resulted in the Fed taking a much more aggressive tack toward reining in inflation — and the central bank’s reaction raises the risk of recession.

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