Recession imminent if ‘fiscal cliff’ of tax hikes, budget cuts not averted, CBO says

The U.S. economy will hurtle into a recession if Congress fails to avert a series of tax increases and budget cuts due in January, the Congressional Budget Office said Wednesday, warning that a fiscal impasse would have consequences even more dire than previously forecast.

The CBO’s gloom sparked another round of political finger-pointing but failed to cast much of a shadow over financial markets. That’s because the Federal Reserve is inclined to act “fairly soon” to boost the slow pace of economic recovery, according to minutes the central bank released Wednesday. Moreover, new data showed signs of modest improvement in the housing market.