Inflation was at 8.5% on average in March, rising year over year at its fastest pace in 40 years, according to the latest consumer price index.

In an effort to harness those surging prices, the Federal Reserve began raising interest rates in March to slow the economy, but high inflation combined with the central bank’s aggressive raising of rates after months of delay is receiving some criticism.  

“The effect is likely to be a recession, given the intensity of inflation and the degree to which unemployment has been driven down,” former Fed chair Randal Quarles said in an interview on Tuesday. “It’s unlikely that the Fed is going to be able to manage that to a soft landing.”

A soft landing would mean a slowdown in economic activity and a deceleration of prices gradual enough not to crash the market and send the economy spiraling into a recession. And despite current Federal Reserve Chair Jerome Powell’s assertions to the contrary, a soft landing is looking questionable.

The Fed initially implemented a wait-and-see strategy when inflation started rising in the last few months of 2021. The approach allowed money to keep flowing as the economy recovered from the COVID-19 pandemic, but it also meant that the Fed waited several months to raise interest rates. The central bank eventually reversed course, but other factors may have exacerbated delays in its response.

Quarles suggested that the Federal Reserve could have acted earlier on inflation, but was slowed by the White House’s indecision over who would lead the bank.

“I think we would have been better served to start getting on top of that in September,” Quarles said. “I think that was hard to do until there was clarity as to what the leadership going forward of the Fed was going to be as an institution.”

President Biden selected Powell to sit a second term to lead the bank in November, after spending months considering the credentials of the other front-runner, Lael Brainard, who is currently the Fed’s vice chair. Powell had made clear his priority would be inflation and higher interest rates if necessary, while Brainard played down long-term inflation fears last year.

Powell was confirmed by the Senate in March 2022, by which time inflation was at 7.9%. 

“There’s a sense that it’s up to the president to decide who’s going to lead the institution at this junction, and he didn’t do that for a number of months,” Quarles said. “Had clarity been provided there, I think the Fed would have acted earlier.”

Despite the delayed response, Quarles says he is confident the Fed will be able to get inflation under control. “I wouldn’t be at all surprised to see them on top of inflation by the first quarter of 2023,” he said.

That will depend on the central bank continuing to raise interest rates and acting on the problem for the rest of this year. But despite the Fed’s best efforts, a recession in some form is still likely, Quarles says, as the economy braces for a rougher landing than hoped for in the coming months.