The Federal Reserve got it wrong on inflation and now it appears to be in recession denial.

More than 60 percent of the 750 CEOs and other executives polled in a survey released Friday by the business research firm the Conference Board said they see a recession coming in the next 12 to 18 months.

Federal Reserve Chairman Jerome Powell repeatedly downplayed the risk of inflation earlier in 2021 before finally admitting in December that he was retiring the word “transitory” to describe the inflationary outlook and believed that the omicron variant could threaten the U.S. economy.

Powell said Wednesday that the central bank hopes to avoid a recession after speeding up the pace of interest rate hikes.

“We’re not trying to induce a recession now, let’s be clear about that,” Powell told reporters after the Federal Open Market Committee, which determines monetary policy, raised short-term rates by 0.75 percent.

However, some 15 percent of the 750 executives polled in May by the Conference Board said they think a recession is already here in the regions where they do business.

The Fed’s 0.75 percent rate increase on Wednesday was its largest since 1994 and Fed officials said it is getting more difficult to slow inflation while avoiding a recession.

Fed tightening has contributed to financial markets going into decline and led many economists to warn of a potential recession.

“We put the odds that the economy will suffer a downturn beginning in the next 12 months at one in three with uncomfortable near-even odds of a recession in the next 24 months,” Moody’s Analytics chief economist Mark Zandi said in a May 16 note. 

President Joe Biden raised questions of credibility when he encouraged Americans to be patient and not believe what economists are saying. “They shouldn’t believe a warning,” Biden said during a Thursday, June 16 interview in the Oval Office with the Associated Press. “They should just say, ‘Let’s see which is correct.'”

The U.S. Federal Reserve has a dual mandate from Congress to maintain full employment and price stability in the economy.

Powell said the Fed aims to slow the pace of inflation and pull it down to its 2 percent target without hurting a “strong” labor market. Forecasts released by the Fed showed confidence in the central bank’s ability to achieve both goals, but economists say it will not be easy, Yahoo Finance reported.

Interest rates are expected to rise to 3.4 percent by the end of 2022, much higher than the 2.5 percent mark that many Fed officials say is “restrictive” for economic activity, according to projections from the Fed published Wednesday.

“[G]oing faster and deeper into restrictive territory implies a greater risk of a hard landing,” ING Economics wrote on Wednesday.

“The combination of inflation that is much too high, to quote Powell, wages that are increasing but not keeping up with inflation, and then the inability to pass all this along is creating a very, very challenging dynamic,” said Roger Ferguson, a trustee of The Conference Board and former Fed vice chairman, in a May interview with CNBC’s “Squawk Box”.

Several prominent technology companies, including cryptocurrency exchange Coinbase and Facebook parent Meta have started layoffs or cost-cutting. Coinbase this week laid off 1,100 employees, 18 percent of its workforce.

“We appear to be entering a recession after a 10+ year economic boom,” Coinbase CEO Brian Armstrong wrote in a letter to employees. “A recession could lead to another crypto winter, and could last for an extended period.”

Photo: People walk across the street near a gas station in Los Angeles, Thursday, June 16, 2022. Soaring gasoline prices have left many consumers with no choice but to cut spending on non-essentials, but it might be coming full circle by stopping some drivers from filling up their tanks. (AP Photo/Jae C. Hong)