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

AP Economics Writers

WASHINGTON (AP) — 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 often stressed that the Fed could quickly lower rates if it decides that it’s needed to bolster the economy. Yet the periodic fear of a forthcoming recession has been a hallmark of the post-pandemic economy — and has proved wrong every time.