Federal Reserve Chair Powell warns of potentially devastating consequences of a U.S. debt default and calls on Congress to raise the debt ceiling.
the latest in an aggressive string of borrowing cost increases as it tries to slash price hikes by slowing the economy and choking off demand. The approach, however, risks tipping the U.S. economy into a recession.Citing elevated inflation and a tight jobs market, Powell said the central bank expects "ongoing increases" to its benchmark interest rate and a sustained period of elevated rates before a change in policy.
Fresh retail sales data last month blew past economist expectations, suggesting resilient consumer spending, the lifeblood of the U.S. economy.soft landing The hot economy could cause inflation to rise, however, prompting the Fed to raise rates further and risk a deeper and more prolonged economic slowdown.conducted last month by the National Association for Business Economics found that 58% of economists expect a recession in 2023.
"Not only will higher interest rates not solve it," the Ohio Democrat added. "If they're overdone, they'll make it worse."
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