I agree that the numbers look strikingly similar to those before the 2001 recession. I would go one step further: even the inflation numbers look the same; yes, inflation was getting pretty high in the summer of 2000, and the Fed had to go up to 6%.
I think the Fed will stop very soon (maybe it already has). Looking at the history of tightening cycles, inflation actually peaks about a quarter AFTER the last hike (meaning that the Fed can smell a slower economy is coming, and stops even before inflation turns down). About 6 months after the last hike the economy slows to near zero, and the Fed starts cutting. Recession usually starts soon after, and lasts for 3 to 6 quarters.
I think the Fed knows that we are very likely to have a recession next year. But as long as they can manage to keep it relatively mild (think 1990 or 2001), they will probably see this as an acceptable way to correct some of the imbalances in the system. The question is, of course, whether they can keep it mild. I personally don’t fear a depression and think that the Fed has pretty good odds, if not of a “soft landing”, at least of a “not really awful landing”. I guess we’ll have to see how this plays out.
