I came across this statement in a fairly official document, the phrase in bold does not seem consistent. I cannot contact the authors of the said document, so I am posing my question here. Here is the statement.
"Under a mild recession followed by a sluggish recovery and inflationary pressure, interest rates rapidly increase and yield curve flattens."
Why would interest rates rapidly increase? Is it understood that the interest rates here refer to the rates the Federal Reserve sets?