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Fed Chairman Jerome Powell says higher interest rates could cause a recession

Chairman of the Federal Reserve Jerome Powell said the central bank’s battle with inflation could lead it to raise interest rates high enough to trigger a recession, offering its most explicit warning this year.

“That’s not our expected outcome at all, but it’s certainly a possibility,” Powell said Wednesday during the first of two days of congressional hearings. “We are not trying to provoke and do not think that it will be necessary to provoke a recession, but we believe that it is absolutely essential” to bring down inflation, which is at its highest in 40 years.