An avalanche of negative news is about to hit the United States economy . The combined effects could push the U.S. into a recession .

Testifying before Congress, Jerome Powell, chairman of the Federal Reserve , said this week that inflation is far from defeated and that the Federal Reserve will continue to raise interest rates by up to another 0.50%. Equally important, Powell indicated that interest rates in the U.S. would remain higher for longer. The rate increases are weighing heavily on the economy. Selling prices for existing homes are experiencing their largest declines in 11 years. When residential housing wealth falls, some homeowners will retrench. Consumer spending, which accounts for 70% of GDP, is already soft . Importantly, personal savings rates are low . It won’t take much to push household consumption into negative territory.

As part of the recent debt ceiling agreement, student loan repayments, which have been suspended, resume on October 1, 2023. Interest accrual on student debt begins one month earlier. Consumers have $1.635 trillion in federal student loan debt. Almost 44 million households will face this new expense. Personal consumption will take a hit.

To compound the negative effect on consumption from the resumption of student loan repayments, many households with student loan obligations have not increased savings in anticipation of the repayment obligations. In fact, a significant number of households with student loan debt have increased their total level of indebtedness. They face a big problem: more debt, less savings, and the resumption of another debt payment. Personal consumption will take a hit in the fourth quarter of this year.

In September, $24 billion in funding for providers of childcare will expire. Many childcare providers are warning that they will raise the cost of providing care, cut staffing levels, and reduce wages for remaining staff members. Some childcare providers will close . Without childcare, some parents will leave the workforce. In October, there is an increasing probability of more bad news for the economy. Current funding for the federal government expires on September 30. The Senate and the House of Representatives are already at an impasse on funding for the new fiscal year, which begins October 1. The Senate wants to fund the government at levels consistent with the recent debt ceiling agreement. The House wants to cut funding levels below the debt ceiling agreement. Any government shutdown would hit consumer confidence, and the federal government’s contribution to GDP would be lower than expected.

The commercial real estate market will also contribute to the bad news. Next year, $1.4 trillion in commercial real estate loans come due. Vacancy rates in some commercial real estate markets are already high. Because of remote work, many businesses have too much office space. Some owners of real estate will walk away from their debts. Banks will foot the bill. As banks face higher default rates, they will increase reserves and reduce new lending. The U.S. economy could be on the precipice of a commercial real estate credit crunch and another banking crisis.

Gale force headwinds are about to hit households and the broader economy. Another 0.50% interest rate increase could be the catalyst for a severe recession. Risks are elevated and rising.

James Rogan is a former U.S. foreign service officer who later worked in finance and law for 30 years. He writes  a daily note  on finance and the economy, politics, sociology, and criminal justice.