The outlook provides a snapshot of the synchronized shock stemming from Russia's attack on Ukraine and the ensuing energy crunch that has inflicted a widespread cost-of-living crisis.
Some of the longtime drivers of higher inflation — spiking gas prices, supply chain snarls, soaring used-car prices — are fading. Yet underlying measures of inflation are actually worsening.
Despite two quarters of GDP decline, the U.S. is not currently in a recession, says the official arbiter of such things, the NBER's Business Cycle Dating Committee.
Still, manufacturing has moderated and risks further loss of momentum as businesses contend with an inventory overhang and an easing in domestic demand for goods.
Fed Governor Christopher Waller believes the central bank can control inflation without inflicting a "painful" spike in unemployment. Others say his analysis "contains misleading conclusions, errors, and factual mistakes."