As inflation sticks around, it is important to think about how it is related to high government debt.
A deep recession could have a significant impact on financial markets.
Even as bank lending tightens, the Fed may still need to keep rates high for longer to bring down inflation.
Given the fragilities in financial markets, the Fed will likely move cautiously in monetary tightening to fight inflation.
In the coming months, the Fed will not likely pivot, but pause and wait with a high level of rates for convincing signs of disinflation.