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Buckle Up: It's Going to Be a Hard Landing

The Federal Reserve's heavily telegraphed move to slow its pace of monetary-policy tightening next week risks sending a message to markets that the central bank is well on its way to reining in inflation and guiding the economy to a soft landing. Investors would do well to re-evaluate.

Regardless of the Fed's pace of monetary-policy tightening, the more consequential message the economy is sending now is that the central bank probably will have to raise interest rates beyond the roughly 5% range that markets are expecting in order to wrestle the current bout of inflation back closer to its target level. And that, in turn, suggests that at least a mild recession looks increasingly necessary for prices to finally cool off.