WASHINGTON—Federal Reserve Chair Jerome Powell has pledged to do whatever it takes to curb inflation, now raging at a four-decade high and defying the Fed’s efforts so far to tame it.
Increasingly, it seems, doing so might require the one painful thing the Fed has sought to avoid: A recession.
A worse-than-expected inflation report for May—consumer prices rocketed up 8.6 percent from a year earlier, the biggest jump since 1981—helped spur the Fed to raise its benchmark interest rate by three-quarters of point Wednesday.
Not since 1994 has the central bank raised its key rate by that much all at once. And until last Friday’s nasty inflation report, traders and economists had expected a rate hike of just half a percentage point Wednesday. What’s more, several more hikes are coming….