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Powell Signals Recession May Be the Price for Crushing Inflation

Sept. 22, 2022, 5:06 AM

Federal Reserve officials gave their clearest signal yet that they’re willing to tolerate a recession as the necessary trade-off for regaining control of inflation.

Policy makers, criticized for being too late to realize the scale of the US inflation problem, are moving aggressively to catch up. They raised interest rates by 75 basis points on Wednesday for the third time in a row and forecast a further 1.25 percentage points of tightening before year end.

WATCH: Federal Reserve Chairman Jerome Powell speaks about the decision to raise its benchmark interest rate by three-quarters of a percentage point.
Source: Bloomberg

That was more hawkish than expected by economists. In addition, officials cut growth projections, raised their unemployment outlook and Chair Jerome Powell repeatedly spoke ...