Aggressive rate hikes will send the economy into a recession

Many experts predict the Fed's aggressive rate hikes will send us into a recession: a shrinking rather than a growing economy. The Fed acknowledges the adverse effects and potential risks of this restrictive monetary policy. And at this point, a recession seems unavoidable.

"I see the likelihood of a recession at 70% right now," said Derek Delaney, certified financial planner and founder of PharmD Financial Planning, in March. If unemployment goes up, a recession could come sooner -- but what happens next with inflation will play a key role in the likelihood and magnitude of a recession.

"Inflation was never going to revert back to a normal level without some economic slowing," said Graff, a message that Powell has made clear for months. "Still, there's risk of some pain resulting from this slowdown."

What this means for your money

The most recent Fed rate hike means that borrowers will continue to see higher interest rates on mortgages, credit cards and personal loans. On the flip side, as interest rates remain high, you can benefit from boosted earnings on your savings.

"The Fed rate hike can lead to higher returns on savings accounts. That is the positive side of the equation," said McClary. "The bad news is associated with the impact on the cost of borrowing. If you owe, you will pay more."

If you have debt or are worried about future economic uncertainty, here are some steps you can take now to prepare.

Tackle outstanding debt

Raising rates for the 10th time, even a little, means banks will follow suit, pushing up the cost of financing a car or buying a home. Higher rates also make it more expensive to refinance your mortgage or student loans. Moreover, the Fed hikes indirectly drive up interest rates on credit cards, so if you carry a balance from month to month, repaying your debt becomes more expensive.

Before taking on a new loan or mortgage, understand exactly what you'll owe: the payment schedule, potential fees and interest rate. Make a debt payoff plan to knock down balances as quickly as you can for any outstanding debt.

"Look at the numbers and make deliberate choices," said Bobbi Rebell, a certified financial planner and author of Launching Financial Grownups. "And also communicate with your family because very few of us operate in an economy of one." Consider transferring outstanding high-interest debt to a lower or fixed interest rate option, if possible, she said. You may also consider a balance transfer card -- as long as you plan to pay the balance before interest accrues -- or a debt consolidation loan.

Check whether your debt carries a fixed or variable interest rate. Many personal and mortgage loans have fixed rates, so if you borrowed recently, you might have a high-interest rate that'll carry through the loan's lifetime. On the other hand, most credit cards have a variable interest rate -- meaning the already very high APR (averaging over 20% right now) on any balances will only grow as rates rise.

And, even if we've seen the last of the Fed's rate hikes for some time, remember that the cost of borrowing won't decrease overnight. "If the Fed were to slow down or stop raising rates, that doesn't necessarily mean your rate is going down. It just might mean that it's not going up," said Rebell. Don't wait to take action. If you need to move debt to a fixed-rate loan, it's better to move now in case rates increase even more in the coming months.