The Fed’s efforts to reduce the multi-decade high inflation by raising rates four times this year have increased the chances of the economy slipping into a recession. After declining 1.6% in the first quarter, the U.S. gross domestic product decreased at an annual rate of 0.9% in the second quarter.
The economy's contraction for the two consecutive quarters makes many analysts believe that a recession has arrived. However, the U.S. unemployment rate dropped to 3.5% in July. The red-hot jobs data could give the Fed more confidence to continue its interest rate hikes.
