So much for the soft economic landing.

The disappointing consumer price inflation numbers released on April 10 suggest that inflation will not come down to the Federal Reserve’s 2 percent target without a recession. The numbers also suggest that interest rates will need to stay high for longer in order to regain control over inflation. That could spell real trouble for the financial system in general and regional banks in particular. It could also make the economy a central focus of the November presidential election.

Over the past year, core consumer prices, which exclude food and energy prices, are estimated to have risen by 3.8 percent—close to double the Fed’s target. This leaves the Fed with little option but to maintain its hawkish monetary policy stance.

In recent public statements, Federal Reserve Chairman Jerome Powell has reiterated that the Fed will only cut interest rates when it sees clear signs that inflation is coming down on a sustainable basis toward........

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