While the Fed’s inflation fight could throw the economy into reverse, a mild slowdown now might help avoid a deeper downturn later.
Inflation like this can’t last forever. How it will end is now the more salient question. Often it takes a recession to break inflation. Economist Lawrence Summers observed that this has been the case every other time inflation was this high and the labor market was this tight.
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Allison Schrager is a senior fellow at the Manhattan Institute and a contributing editor of City Journal.
This piece originally appeared in Bloomberg Opinion