It’s tempting for the Fed to move slowly. That would be a grave error.

The Federal Reserve will over the next several months make monetary policy decisions that are as consequential as any it has made since the financial crisis and Great Recession of 2007-2008. The temptation in a highly uncertain and politicized environment will be to move cautiously. Yet this would be a grave error in the current context, where a recession could be catastrophic and the odds of one beginning in the next year, while still less than 50-50, now appear significant and increasing.

While the headline number for first-quarter growth in gross domestic product (GDP) was a robust 3.1 percent, the details of the report suggest much weaker prospective growth. Jason Furman has highlighted that the gap between GDP as reported and the conceptually equivalent GDI, (gross domestic income) measure is now at its highest level since the onset of the Great Recession.