The Fed continues to aggressively hike rates to bring down inflation, which is stubbornly sitting at an annual rate of 8.2%—far from the central bank’s target of a 2% inflation rate. The more aggressive rate hikes are, the more economic pain we might all feel going forward. That could mean more job losses, more volatility in the markets, and more expensive loans from your bank, whether it’s for a house, a car, or your credit card debt. All of that brings a greater likelihood of that dreaded R word: recession. Stocks are falling today ahead of the Fed’s next moves. Markets had largely mounted a comeback this month amid higher-than-expected growth in consumer spending and mixed earnings reports. While some companies reported strong growth, Meta and other tech heavyweights signaled that growth was slowing amid headwinds including the Fed’s rate hikes. But that’s not all we will be watching: In a double whammy to your portfolio and to your job prospects, the Labor Department will also release the latest jobs report at the end of the week, which could show if unemployment is rising. The job market has been very strong so far. There are still more jobs than there are workers, wages keep rising, and the unemployment rate is still relatively low. On Friday we will see if the Fed’s rate hikes have taken a bigger toll, which could signal that a recession is approaching. -Kristin
