Surging inflation and gas prices have led to concerns of a potential recession and the economic pain that could be induced as a result of increasing interest rates to cool off the economy.
The spiking consumer prices are due, in part, to the injection of cash into the economy of the wake of the COVID-19 pandemic, as well as the global uncertainty created by the war in Ukraine.
University of Albany economics professor Kajal Lahiri in an interview with Capital Tonight explains how the Federal Reserve is trying to guide the economy in for a soft landing by decelerating growth in prices and making it harder to borrow money.
This could lead to higher unemployment in the future, however, making these efforts all the more complicated. A recession, too, is an ill-defined term, Lahiri says, making it difficult to pinpoint.