Former New York Fed President William Dudley on Tuesday said an economic recession is “pretty likely” in 2023 because the central bank is working aggressively to tamp down inflation.
He added that the Federal Reserve has its finger on the dial and could keep things from tipping into a deep problem.
“What’s different this time I think is that if we have a recession, it’s going to be a Fed-induced recession and the Fed can end the recession by subsequently easing monetary policy,” Mr. Dudley told Bloomberg.
The Federal Reserve steadily increased interest rates last year in an attempt to cool down the economy and wrangle the highest rate of inflation in four decades.