Regardless of the Fed’s repeated interest rate increases, the persistent four-decade high inflation has shown no signs of slowing, prompting fears of more aggressive interest rate hikes. Federal Reserve Chairman Jerome Powell said that failing to restore price stability would be a “bigger mistake” than pushing the U.S. into a recession and signaled to keep moving the interest rates higher in the months ahead.
Bank of America chief U.S. economist Michael Gapen forecasts a mild recession starting in the second half of 2022 and said, “We have to curb things domestically to help us get where we want to go on inflation.” An increase in interest rates affects tech stocks since the industry is heavily dependent on debt.
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