Not if reality is followed in any legitimate fashion..
There will almost certainly be a recession by next year. Pretty certain not a depression.
It will be by design. The Fed is going to intentionally create a moderate recession to cool inflation without having to raise rates too high and blow the national debt up.
Creating a recession will cool inflation due to demand destruction (instead of further rate hikes) by putting some people out of work and putting a little economic fear into the populace. That will ease tight labor market as some people will be out of a job and looking for work, and demand destruction as people will feel economically vulnerable and cut back spending, thus easing inventory pressure.
That will ease inflation without having to raise rates too high. Relying only on rate hikes alone could not cool inflation enough without making the carrying cost of the national debt unsustainable. Recession is another tool in the Fed's kit. Inflation will be tamed by a combination of a certain amount of rate hikes and an engineered recession together.
It worked for Paul Volker.
[Edit] Regardless, rate hikes and/or recession all spell doom for the stock market at it's current valuations.
Just to be clear, many feel that the Fed will pivot and start printing at the first sign of a serious market crash and/or recession. I am
NOT in that camp. I believe the market crash (i.e. destroying the wealth effect will also help cool inflation) and recession are
intentional Fed strategies. They are not bugs; they are features. So despite past behavior, I do not expect the Fed to reactively start printing.
I expect them to only consider printing if the engineered recession risks turning into a depression. Though they may decide to pause rate hikes and QT at some point to let things stabilize or if they reach inflation ~3%.
