Despite consecutive aggressive rate hikes, inflation is still higher than the federal target. This is raising recession fears. Moreover, the unemployment rate is expected to reach almost 4.5% in 2023, up from 3.5% in September 2022. While this might appear to be a grim projection, it would still be relatively low in a historical context.
Boston Federal Reserve President Susan Collins believes, "There is a pathway to re-establishing price stability with a labor market slowdown that entails only a modest rise in the unemployment rate."
