The stubbornly high inflation has shown no signs of slowing down, as was evident from August’s CPI report. Yesterday, the Fed announced a 75 basis-point interest rate hike for the third consecutive time and hinted at continuing its aggressive policy measures until inflation reaches its target level.
The Fed’s aggressive stance has led to many economists predicting a recession by next year. Nouriel Roubini, CEO of Roubini Macro Associates, predicts that a recession will likely hit the United States by the end of this year before spreading globally next year. He said, “It’s not going to be a short and shallow recession; it’s going to be severe, long, and ugly.”
