This week alone, all three major U.S. stock indexes entered a bear market, while inflation in Germany reached a 70-year high. On Wednesday, the Bank of England announced unprecedented emergency measures to bolster the U.K. bond market.

And as global economic sentiment trends downward, officials from the International Monetary Fund (IMF) are warning of more difficult times ahead.

“We do expect some countries to face recession in ‘23,” IMF spokesperson Gerry Rice told reporters on Thursday. “It’s too early to say whether that would be a widespread global recession.”

His remarks served to amplify those he made two weeks earlier.

“Even if some countries are not technically in recession and they’re still in positive growth,” Rice said, “for many people all over the world, it will feel like a recession.”

Global output slowed during the second quarter of this year because of high inflation in the United States and Europe, a slowdown in China amid COVID-19 outbreaks, and further negative spillovers from the war in Ukraine.

The effects of this slowdown are even more severe in developing countries, as pricey exchange rates, high commodity prices and reduced crop yields exacerbated by the effects of climate change have decimated the profit margins of local businesses and entrepreneurs.

Taking these factors into account, the IMF lowered its global growth expectations to 3.2% in 2022 and 2.9% in 2023 — a downgrade of 0.4 and 0.7 percentage points, respectively, from earlier projections.

Set to release a updated outlook in early October, representatives within the organization anticipate that economic conditions will continue to “tighten” in the short term.

“Clearly, what we had characterized as a global economic slowdown has only intensified in recent weeks and months,” Rice said.

He later added that the surging U.S. dollar is bringing additional stress on the global economy.

The U.S. Dollar Index, which tracks the dollar against a basket of other foreign currencies, has risen by 16.9% year to date, on track for a record gain. When weighed against the dollar, the British pound, the Chinese yuan and the euro have reached lows not seen in decades.

Much of this is due to the actions of the U.S. Central Bank.

As part of its domestic fight against inflation, the U.S. Federal Reserve has aggressively increased interest rates, thereby making it more expensive to borrow the world’s reserve currency. This has, in turn, upped the price of the dollar to levels not seen in 20 years.

While a higher U.S. dollar is good for U.S. importers and travelers, Morgan Stanley’s Chief U.S. Equity Strategist Michael Wilson told Bloomberg on Tuesday that similar surges by the world’s reserve currency have historically led to financial or economic crises.

“The dollar is at a point where it’s causing real stress in the real economy, mostly outside of the U.S.,” he said. “Emerging markets have been terrible; some of the other regions have had stress because of the stronger dollar in addition to higher commodity prices, which is a double whammy.”

In addition to the damage to to foreign markets, a rising dollar also hurts the financial results of multinational corporations. Microsoft, Netflix, and Johnson & Johnson, which typically earn billions in foreign revenue, have already reported lost earnings.

Because of the U.S. central bank’s fight to slow inflation, economists, businesses and families are growing increasingly pessimistic about the short-term economic outlook. A measure of economic sentiment compiled by the European Commission has fallen for seven consecutive months, while a similar measure of U.S. sentiment shows consumer confidence has fallen below the 50% mark.

Despite these concerns, the central banks remain steadfast in their commitment to lower inflation.

In a press conference last week, U.S. Federal Reserve Chair Jerome Powell told reporters that restoring price stability will require an even more restrictive policy stance going forward.

“Reducing inflation is likely to require a sustained period of below trend growth,” he said. “But restoring price stability is essential to set the stage for achieving maximum employment and stable prices over the longer run.”

“We will keep at it until we’re confident that the job is done,” he added.