The economy right now is the Fed's 'worst nightmare' and there's a 50% chance of a global recession, Citi economist says

According to Citigroup's team of economists, there is a 50% chance of a global recession.

The recent economic data has been the central bank's worst nightmare, according to Nathan Sheets, Citigroup's global chief economist.

It is difficult for central banks to fight that. "I'm cautious to use the word, but it feels at the moment that we're going through a period..."

Two jumbo sized rate hikes in June and July were driven by the Fed's concern that high inflation and low growth will continue.

Although stocks rallied after last week's policy move, experts don't think inflation will come down quickly. The Fed will have to decide whether to tolerate high inflation or allow the economy to go into a recession if it hikes rates too quickly.

The US was likely to fall into a recession in the second half of the year, and Europe was in for a downturn by the end of the year, according to Sheets' predictions.

Citigroup's team of economists called a global downturn a "clear and present danger" in a note in July, saying they expected the economy to grow by just 3.0% this year and 2.5% the following year.

There is a chance that we all go down together. According to Sheets, there is a 50% chance of that happening.

According to the International Monetary Fund, the global economic outlook remained "gloomy and uncertain" due to supply-pressures stemming from Russia's economic war with the West.