The first two quarters of 2022 began with negative growth in the gross domestic product. It seemed as if we were headed into a recession. The Fed had to tame inflation that was getting out of control, so it raised the target Fed funds rate from 0.25% in March to 4.5% now. In the face of these higher interest rates, rising debt levels worldwide stemming from policies to weather the pandemic put severe constraints on fiscal policy. In the U.S., federal debt held by the public was $24 trillion in the third quarter of 2022, which amounted to 95% of GDP, up from 80% before the pandemic. China’s zero-Covid policy continued to put a drag on global supply chains. Russia’s war on Ukraine created global anxiety and rising oil and food prices.
