That will pressure margins which, although they are coming off a high level, at some point will trigger a recession.
Based on the graph above it takes a couple of years, but corporate margins peaked at the end of 2014, so we are 2 1/2 years into compression. Looking at the dotcom period, margins peaked in Q7-97, but really only started to tumble 2 1/2 years later in mid-2000, which is more or less where we are now.
In the mid-00s it was Q3-06, and things went wrong about 2 years later, albeit the Fed was hiking more aggressively then.
Eitherway we are 2 1/2 years into a margin compression story and the Fed is slowly hiking as we are below all Fed estimates of NAIRU and Core PCE is only slightly below 2% target and that is only due to a few sub-components with specific issues.