Fed's Actions Increase Likelihood of Recession for Consumers

Recession odds have increased due to the Federal Reserve's aggressive rate hiking campaign, which has led to higher borrowing costs and payments, causing consumer delinquencies to rise. The Fed's focus on fighting inflation has put it in a difficult position, as each rate hike further strains consumers and the financial system. The recent failures of Silicon Valley Bank and Credit Suisse have added to the risks. The contraction in nominal M2 is also ringing alarm bells, as it implies a real risk that the Fed will overtighten, causing a recession.