Ex-New York Fed Chief Admits ‘Fed-Induced Recession’ Is ‘Pretty Likely’ in 2023

Former central bank chief explains how the Fed will cause a recession to fight inflation that was also ultimately caused by the Fed.

Image Credits: screenshot/YouTube.

The former head of the New York Federal Reserve William Dudley warned that a recession is “pretty likely” to come in 2023 and that it will be caused by the Federal Reserve itself.

“A recession is pretty likely just because of what the Fed has to do,” Dudley told Bloomberg News on Tuesday.

Dudley went on to admit that the upcoming recession will be caused by the Fed raising interest rates in a bid to cool off high inflation.

“But what’s different this time I think is that if we have a recession, it’s going to be a Fed-induced recession and the Fed can end the recession by subsequently easing monetary policy,” he said.

In other words, the only way to end the recession is to print more money — the exact mechanism which brought about the historically high inflation in the first place.

Dudley even explained that the Fed is raising rates to raise the unemployment rate and therefore deliberately “slow down the economy.”

But because it’s the Fed that’s driving the recession, “I don’t think that there’s a big risk of a financial-instability cataclysm that pushes the economy into a deep recession,” Dudley said.

Notably, the historic 40-year-high inflation was driven by the Federal Reserve’s artificial suppression of interest rates since 2008 and printing of about $5 trillion during the COVID crisis.

In sum, the Fed is about to cause a recession by purposely slowing down the economy to fight the high inflation it also created.


After claiming inflation was “transitory” for over a year, the Fed finally began raising interest rates in 2022, where it’s now at 4.5%.

As economist Peter Schiff has noted, contrary to the popular belief among mainstream financial circles, a slowing economy won’t ease inflation, but will accelerate it, because as Dudley just admitted, the Fed’s only recourse is to return to low interest rates and printing more money.

“The Fed won’t succeed in killing inflation. But it will kill the economy. And that’s because it’s a bubble. The entire economy is based on artificially low interest rates,” Schiff said in September 2022.

“There is no way to normalize interest rates after more than a decade of abnormally low interest rates and not let everything come toppling down,” he added.

Thus, the Fed’s ultimate strategy to fight inflation is with more inflation, which will inevitably fail and compel the Fed to introduce its Central Bank Digital Currency system.

The Hegelian Dialectic of Problem-Reaction-Solution at play once again.

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