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The Fed's high rates spur fear of slowdown, yet recession signals have so far proved wrong
National

The Fed's high rates spur fear of slowdown, yet recession signals have so far proved wrong

  • By CHRISTOPHER RUGABER and PAUL WISEMAN AP Economics Writers

The turmoil shaking global financial markets reflects a sudden fear that the Federal Reserve may have held its key interest rate too high for too long, heightening the risk of a U.S. recession.Economists and Wall Street traders now expect the Fed to cut its benchmark rate, which influences borrowing costs for consumers and businesses, much faster than they thought just a week ago. Chair Jerome Powell has said that the Fed could quickly lower rates if it decides that it's needed to bolster the economy. Yet fear of a recession has become a hallmark of the post-pandemic economy — and has been wrong every time. Instead, contrary to what most analysts have predicted, steady economic growth and a solid pace of hiring have so far persisted.

Business

Markets feed fear

  • Updated

NEW YORK — The stock market is starting to feed economic fear, not just reflect it.