Stubbornly high inflation has Wall Street worried that the Federal Reserve will respond by raising interest rates until the United States tumbles into recession, taking the weakening global economy with it.
While analysts say the U.S. economy grew in the third quarter, signs of trouble are multiplying, here and abroad. Higher mortgage rates are chilling the U.S. housing market; energy shortages are hurting German factory output; and recurring coronavirus lockdowns are hobbling Chinese businesses.
The Fed and other central banks are tightening credit to fight historically high inflation even as three of the world’s main economic engines — the United States, Europe and China — are sputtering. With the United States and other governments also reducing spending on pandemic relief measures, the global economy is getting less support from policymakers than at almost any time in 50 years, the World Bank said on Thursday in a new report…
