The U.S. economy is shrinking. The Fed’s rate hikes may have only just begun to bite
“We do want to see demand running below potential for a sustained period to create slack and give inflation a chance to come down,” Powell said on Wednesday. “It’s also worth noting that these rate hikes have been large and they’ve come quickly, and it’s likely that their full effect has not been felt by the economy. So there’s probably some additional tightening – significant additional tightening in the pipeline.”
