If you are a parent, you may know the sinking feeling of seeing your child about to take a big fall when you're too far away to prevent it.

• The IMF, in its new assessment of the global economy published this morning, sounded like such a parent.

Driving the news: "In short, the worst is yet to come, and for many people 2023 will feel like a recession," the IMF said in its gloomy new World Economic Outlook.

• The fund's economists see the world economy growing 2.7% next year, a 0.9 percentage point lower than they envisioned in April. They also revised up their forecasts for inflation this year and next.

State of play: In effect, the fund sees price pressures as so deeply entrenched that central banks, especially the Fed, have little choice but to move aggressively to try to crush demand. But that sets in motion a series of disturbances the world is only starting to wrestle with.

• "Persistent and broadening inflation pressures," the report says, "have triggered a rapid and synchronized tightening of monetary conditions, alongside a powerful appreciation of the U.S. dollar against most other currencies."
• In effect, the Fed's actions to try to crush domestic inflation have the effect of strengthening the dollar, which tends to make inflation worse elsewhere and can trigger debt crises.

Meanwhile, Fed officials speaking yesterday in Chicago acknowledged the risks of global distress — while making clear they have no intention of backing off their rate hike campaign in the near future.

• Vice chair Lael Brainard addressed a ballroom full of economists at the National Association for Business Economics, saying "the combined effect of concurrent global tightening is larger than the sum of its parts," and the Fed will account for spillovers.
• She added that fragile financial markets make the risk of disruption higher than usual. But, crucially, she did not suggest the Fed will back off.
• At the same gathering, Charles Evans, president of the Chicago Fed, told reporters that "one way or another, we have made the judgment that we're going to put a lot of restrictiveness in place, no matter how the data comes in."

What's next: Expect American officials to get an earful at the IMF and World Bank annual meetings this week, which also include Group of 7 and 20 finance ministers and central bankers from countries whose financial systems are being tested by the rising dollar.

The bottom line: The titans of global finance at the IMF and Fed are not blasé about the risks on the horizon. But they are — for now, at least — viewing the pain ahead as a necessary evil.

After two months of steep drops in consumer inflation expectations, a closely followed survey offered more of a mixed message.

Why it matters: The Fed is closely watching inflation expectations amid worries that consumers will view higher inflation as a lasting feature of the economy. That may force them to alter behavior in a way that could push inflation up.

What's going on: In a welcome development, short-term inflation expectations continued to drop last month, according to the New York Fed's Survey of Consumer Expectations. Survey respondents expect inflation of 5.4% over the next year, down from the 5.7% registered in August.

Longer-term inflation expectations, however, moved in the wrong direction.

• Three-year-ahead expectations edged up to 2.9% last month, 0.1 percentage points higher than in August. Over the next five years, consumers bumped up inflation expectations by 0.2 percentage points to 2.2%.

The bottom line: Inflation expectations are still above the Fed's preferred 2% rate.