>> ERIC: THE FEDERAL RESERVE HAS BEEN QUICKLY RAISING RATES, HOPING TO CALM INFLATION.

MANY ECONOMISTS HAVE FEARED A RECESSION IS LOOMING, BUT WITH MORE JOBS AND SIGNS THAT THE HOUSING MARKET MAY BE PICKING BACK UP, WE'RE WONDERING ABOUT THE ODDS OF THAT RECESSION AFTER ALL.

HERE TO TALK US THROUGH LOTS OF ECONOMIC QUESTIONS, CHRIS FARRELL, ECONOMICS REPORTER FOR AMERICAN PUBLIC MEDIA.

ALL RIGHT.

YOU RAISE INTEREST RATES, YOU TAME INFLATION, YOU SLOW THE RATE OF GROWTH.

VOILÀ, RECESSION.

IS THAT HOW IT'S SUPPOSED TO WORK?

>> NO.

WELL, WE HOPE IT DOESN'T WORK THAT WAY.

WHAT THEY IDEALLY WOULD DO IS RAISE RATES, SLOW DOWN THE RATE OF INFLATION AND THE ECONOMY SKIPS A RECESSION.

SLOWS DOWN, NO QUESTION IT SLOWS DOWN IF YOU LOOK AT THE HOUSING MARKET, FOR EXAMPLE, AND HOUSING MARKETS VARY AFFECTED BY THE RISE IN INTEREST RATES.

AND, YOU KNOW, THAT WE CALL IT THE GOLDILOCKSES ECONOMY AND IF YOU AT JANUARY'S NUMBER CREATED, WHAT, 570,000 JOBS, JOBS,.4% UNEMPLOYMENT RATE, AND YET THERE ARE SIGNS THIS INFLATION IS MODERATING, SO WHAT YOU'RE NOTICING ON WALL STREET, THE ECONOMISTS -- EVERYONE IS TALKING ABOUT PERCENTAGES, RIGHT.

64% CHANCE OF RECESSION, BUT IT'S KIND OF SHRINKING.

THEY'RE STARTING TO THINK, TALK A LITTLE BIT MORE ABOUT WE MIGHT SKIP A RECESSION.

>> Cathy: SO MINNEAPOLIS FED CHAIR, KNEEL CASH KARI WAS OUT THERE WEEK SAYING MORE WORK NEEDS TO BE DONE TO TAME INFLATION, WHICH MEANS WHAT?

>> WELL, SO, THE FED GOVERNORS AND HE FED PRESIDENTS, LIKE NEEL KASHKARI, THEY'RE ALL READING FROM THE SAME PLAY BOOK AND THEY'RE ALL OUT THERE AND TALKING TOUGH AND WHAT THEY'RE SAYING IS WE'RE GOING TO CONTINUE TO RAISE RATES BECAUSE THEY'RE REALLY NERVOUS.

IF YOU LOOK AT THE ACTION IN THE MARKET, BOND TRADERS, THEY'RE SORTING TO LICK WE MIGHT SKIP A RECESSION, MAYBE THE FED ISN'T GOING TO RAISE RATES AS HIGH AS THEY WANT AND WHAT THEY'RE ERVOUS ABOUT IS THEY WANT TO MAINTAIN THIS POSTURE THAT THEY'RE STILL -- WE HAVE TO TAKE A LITTLE BIT MORE, AND THEY'RE GOING TO, BUT WHAT THIS REPORT DID IN JANUARY, YOU KNOW, THIS INCREDIBLE JOB REPORT DID, IS IT GAVE THE FED A LITTLE BIT OF BREATHING ROOM SO MAYBE IT ONLY BE ANOTHER QUARTER POINT AND ANOTHER QUARTER POINT AFTER THAT, BUT THESE DRAMATIC THREE-QUARTERS OF PERCENTAGE POINT MOVES THAT THEY WERE DOING IN 2022, LOOKS LIKE THAT'S OVER WITH.

BY THE WAY, YOU GET THE INFLATION NUMBERS NEXT WEEK SO THAT, AGAIN, THIS MURKY POST-PANDEMIC ECONOMY, WHAT WILL THE NUMBER BE?

PEOPLE ARE ALL OVER THE LOT.

>> Eric: COULD THIS DEBT CEILING CONTROVERSY COME INTO PLAY, IN THIS CASE O.ECONOMICALLY?

>> IF YOU LOOK AT THE ECONOMICS, THEY'RE GOING IF THE RIGHT DIRECTION.

AS FAR AS PEOPLE ARE CONCERNED, THE ECONOMY IS NOT GDP, IT'S JOBS, RIGHT?

THAT'S WHAT THE ECONOMY IS ALL ABOUT AND THEN, YOU KNOW, OBVIOUSLY WITH HIGH INFLATION LESS PURCHASING POWER, YOUR WAGES AREN'T GOING AS FAR AS THEY DID, SO WAGES ARE REALLY IMPORTANT.

THERE ARE TWO THINGS OUT THERE THAT COULD REALLY MESS UP THIS ECONOMY.

ONE OF THEM IS, WE GET A BIG SPIKE IN ENERGY PRICES BECAUSE OF THIS WAR IN UKRAINE, SOMETHING THAT WE CAN'T REALLY FORECAST.

AND THE OTHER IS THIS FAKE CRISIS, THIS FALSE CRISIS, THIS CRISIS THAT SHOULD NEVER HAPPEN CALLED THE DEBT CEILING CRISIS, RIGHT?

THERE IS NO GOOD THAT COMES FROM THE DEBT CEILING CRISIS, SO EVERYONE HAS GOT THEIR FINGERS CROSSED THAT THERE IS A LOT OF VERBAGE, A LOT OF POSTURING BUT IN THE END, YOU KNOW, WE RAISE THE DEBT CEILING BECAUSE IT'S A BAD -- THIS IS JUST A BAD THING.

>> Eric: IS THE DEBT CEILING CONSTITUTIONAL?

>> NO, NO.

WE JUST SHOULD GET RID OF IT.

VOTE AWAY -- JUST GET RID OF IT AND THEN THERE IS A SERIOUS LEGITIMATE DEBATE ABOUT THE DEBT THAT WE HAVE AND HOW ARE YOU GOING TO LOWER IT.

FINE, BUT THIS DEBT CEILING CRISIS, I REMEMBER THE FIRST ONE AND YOU CALL AROUND TO ECONOMISTS AND THEY GO OH, CHRIS, COME ON, THIS IS JUST A MEDIA-GENERATED THING.

THEN THE SECOND ONE, THEY GOT A LITTLE BIT SCARED FROM THE FIRST ONE AND THEY'RE LIKE THIS IS GETTING A LITTLE BIT TOO SCARY.

THIS TIME WHEN YOU CALL AROUND, PEOPLE ARE HEDGING THEIR BELTS.

THEY DON'T REALLY KNOW WHAT'S GOING TO COME OUT OF THIS.

PART OF IT IS UNCLEAR WHAT THE REPUBLICANS ARE NEGOTIATING FOR SO THIS IS THE FULL FAITH AND CREDIT OF THE GOVERNMENT, YOU ENCAPSULATE IT.

EVERY PAMPHLET FOR A 401:00, THE REST-LESS SECURITIES ARE TREASURIES, WHETHER THAT'S TREASURY BILLS, TREASURY BONDS, THIS IS PART OF EVERY RETIREE PORTFOLIO UT THERE.

THEY'RE RISK-LESS SECURITY, YOU'RE GOING TO PUT THAT AT RISK?

HUM.

>> Cathy: SAY, GOING BACK TO THE JOBS REPORT AND THAT WAS A REALLY ROBUST JOBS REPORT.

HOWEVER, THERE IS SOFTNESS AND SOME CONCERN IN THE TECH INDUSTRY WITH THESE LAYOFFS, SO HOW MUCH OF A RED FLAG IS THAT?

>> SO, WHAT -- THERE ARE LAYOFFS IN THE TECH INDUSTRY AND THERE ARE GOING TO BE MORE LAYOFFS IN THE TECH INDUSTRY, THAT'S ABSOLUTELY NO DOUBT ABOUT IT.

IT'S BEING DWARFED, OR SWAMPED, WHATEVER METAPHOR YOU WANT TO USE BY HIRING IN LEASE SURE, HOSPITALITY, BARS, RESTAURANTS, HOTELS AND EMPLOYS ABOUT 36% OF THE WORKFORCE.

TECH'S LIKE ABOUT 2% OF THE WORKFORCE BUT HERE'S THE OTHER TWIST ON TECH AND BY THE WAY, NOT MINIMIZING WHEN SOMEONE LOSES THEIR JOB, IT'S A GUTS PUNCH, DOESN'T MATTER, BUT THEY HAVE SKILLS THAT ARE REALLY VALUED IN THIS ECONOMY SO THE EVIDENCE THAT WE HAVE, MORE THAN ANECDOTAL BUT NOT NECESSARILY COMING FROM THE GOVERNMENT IS THAT PEOPLE ARE GETTING REHIRED FAIRLY QUICKLY.

TYPICALLY AT A LOWER WAGE.

>> Eric: LOWER PAID -- >> LOWER PAID JOB BUT DOESN'T COME WITH NECESSARILY THE FREE -- >> Cathy: THE PERKS.

>> SOME OF THE PERKS.

>> Eric: PING-PONG TABLE SOME OF THAT TABLE -- >> Eric: