This is the web version of the WSJ’s economic newsletter. You can sign up for daily delivery here. Good morning! Today we look at the Fed’s latest challenge—how to stop the economy from overheating—the price of trade tensions, mismeasurement of the gig economy (maybe), and the skyrocketing cost of washing machines. COOL IT Federal Reserve officials are almost certain to raise the central bank’s benchmark interest rate Wednesday. The big question: How many more will follow this year and next? The economy is growing at the strongest pace in four years (tracking estimates put second-quarter GDP above 4%), the unemployment rate is down to levels rarely seen in the past half century, and the latest inflation data shows the Fed’s 2% goal is in reach. Higher rates seem pretty certain, right? “We expect rising interest rates to cause economic growth to slow sharply next year, especially as the boost from fiscal stimulus fades. best judgement is that there’s a 30% chance of a mild recession before the end of the decade, but the risks would increase if the surge in market interest rates is sustained,” economists at Capital Economics said in a research note. RECESSION 2020? Economists aren’t great at forecasting recessions, of course. But as a recent WSJ survey noted, there’s a rough consensus that the next one will strike in 2020, ending the second-longest expansion in U.S. history. The cause: an overheating economy leading to Fed tightening. J.P. Morgan Michael Feroli asks if non-economists are of a similar mind. If they are, “we should expect cautious spending and financial decisions…which would limit the type of excesses that normally contribute to recessionary dynamics,” Mr. Feroli said. That’s not a bad thing. It could “mollify the severity of the next downturn.” Do you think a recession will strike in the next two years? Write to Jeffrey Sparshott at firstname.lastname@example.org, tweet to @WSJecon and visit wsj.com/economy for the latest. WHAT TO WATCH TODAY The U.S. producer price index for May, out at 8:30 a.m. ET, is expected to rise 0.3% from the prior month. Excluding food and energy, economists expect a 0.2% gain. The Fed’s monetary policy statement is due out at 2 p.m. ET. Fed Chairman Jerome Powell’s press conference is at 2:30 p.m. TOP STORIES FED: WHAT TO WATCH Via WSJ Fed watcher Nick Timiraos, here’s what to watch in Wednesday’s Fed statement and press conference: 1.) How many rate increases are expected this year? In March, the median projection was three. Economist are forecasting one more, bringing the total to four. 2.) Will the statement or Fed Chairman Powell talk about trade tensions and other global risks, and will those risks keep rates lower for longer? 3.) Where do officials see the neutral rate, where the Fed is neither spurring nor slowing growth? 4.) Will the Fed stop describing policy as “accommodative” and make other tweaks to the statement? Bonus for Fed nerds: Will the Fed change the way it sets the Fed-funds range? WASHINGTON WINS THE STANLEY CUP, TOO President Donald Trump said Canada’s trade spat with the U.S. will cost the northern neighbor “a lot of money.” The president’s latest comments suggest the feud could simmer for a while, potentially hanging over discussions to rewrite the North American Free Trade Agreement, Vivian Salama and Paul Vieira report. The Toronto-based C.D. Howe Institute said that among major economies, Canada would suffer the largest negative impact from the U.S. steel and aluminum tariffs—6,000 job losses and $8 billion Canadian dollars ($6.15 billion) off of annual economic output. Don’t forget: the Trump administration says it isn’t done. Keep an eye out for more tariffs on China. Could autos follow? THE GIG IS UP? Last week we wrote how the gig economy is a massively overblown phenomenon after a Labor Department survey showed the share of contract and freelance workers in the labor force fell between 2005 and 2017. But wait a second. “It would at least be hasty to conclude that alternative employment arrangements declined between 2005 to 2017. And more important, the BLS data are not an accurate description or measure of gig-economy work, since they exclude most workers engaged in this type of work through supplementary income,” said the State University of New York at Purchase’s Liya Palagashvili. CHART OF THE DAY: WASHING MACHINES The Trump administration in January imposed tariffs of up to 50% on washing machines. Here’s what happened next: Laundry equipment prices skyrocketed, according to the May consumer price index. That’s helpful in the short run for domestic manufacturers, not so much for consumers. “I remain of the view that the President’s protectionist agenda is also raising inflation both directly through higher costs (lumber, steel, washing machines—up a cumulative 17%…in the past 2 CPI reports) and indirectly by undermining (somewhat) the price restraint that comes from competitive markets,” said Suttle Economics’s Phil Suttle. QUOTE OF THE DAY “The parties have waged an epic battle, under extremely restricted deadlines, to litigate and try this historic vertical merger case…It has been a herculean task for all the parties and the Court. Each side has had its proverbial day in Court. The Court has now spoken and the defendants have won.” – Judge Richard Leon, in his 172-page opinion allowing AT&T’s proposed merger with Time Warner TWEET OF THE DAY [wsj-responsive-sandbox id = "0" ] WHAT ELSE WE’RE READING The U.S. is the world’s most dynamic economy and Europe is old and sclerotic, right? “Today, European markets have lower concentration, lower excess profits, and lower regulatory barriers to entry,” Germán Gutiérrez and Thomas Philippon write in a National Bureau of Economic Research working paper. The reason: Better regulators. “European institutions are more independent than their American counterparts, and they enforce pro-competition policies more strongly than any individual country ever did.” The number of babies born in the U.S. last year dropped to a 30-year low. What gives? “Birth rates fell the most in counties where home values grew the most, and birth rates fell less and sometimes even increased in counties with smaller home price increases,” Zillow’s Jeff Tucker writes in a research report. It’s a correlation, not necessarily a causation. But having a kid is expensive, so it wouldn’t be implausible if housing costs fed into the decision of whether or when to have children. UP NEXT: THURSDAY The European Central Bank releases a policy statement at 7:45 a.m. ET, and the ECB’s Mario Draghi holds press conference at 8:30 a.m. ET. U.S. retail sales for May, out at 8:30 a.m. ET, are expected to rise 0.4% from the prior month. U.S. jobless claims, out at 8:30 a.m. ET, are expected to register at 225,000 U.S. import prices for May, out at 8:30 a.m., are expected to climb 0.6% from the prior month.