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JPMorgan Chase CEO Jamie Dimon says an economic hurricane is coming. Tesla’s Elon Musk says he has a “super bad feeling” about a recession. Companies are downgrading their earnings forecasts. Oh, and we’re in the midst of an energy and inflation crisis, and stocks have been flirting with a bear market.

It’s easy to feel miserable about the economy. And it turns out most Americans do: Only 23% of the US public say economic conditions are “somewhat good” or better, a recent CNN Poll conducted by SSRS found.

And yet those same Americans keep spending like crazy — because nearly everyone has a job. We just got another pretty robust jobs report Friday: America added another 390,000 jobs in May. To put that in context, that’s more than double the average 186,000 jobs the US economy was creating each month during President Donald Trump’s administration before the pandemic — you know, just a few years ago, when Americans were super jazzed about the economy.

So who’s right?

The Fed is slamming the brakes

If you’re feeling like the US economy is slowing down, you’re not alone. In fact, that slowdown is intentional.

The Federal Reserve had been giving the economy a sugar rush since March 2020 by buying billions of dollars of government bonds and corporate debt each month and by keeping rates near zero for two years.

The economy got high on the Fed’s supply, and inflation zoomed to a four-decade high. In March 2022, Fed Chair Jerome Powell finally said, “no más,” and the central bank raised rates. In May, the Fed issued the biggest rate hike in more than 20 years, and it pledged that the beatings would continue until morale improves.

A steady stream of historically large rate hikes and a rapid downsizing of the Fed’s balance sheet should help cure the economy’s addiction to free money: By slowing the economy, the Fed hopes to tame inflation. But it could also plunge the economy into a recession.

Strong dollar hurts multinationals

I know what you’re thinking: What does this mean for giant megacorporations with big, global footprints?

Well, Timmy, it’s not great news. Microsoft (MSFT) this week downgraded its earnings and sales forecasts for this quarter because the dollar is so strong.

Yup, now we have another thing to worry about: Thanks to the Fed, your money may be worth too much.

Rate hikes help boost the value of the dollar, which is near parity with the euro for the first time in two decades. That’s good news if you’re doing some international travel and bad news if you’re a giant American company that makes money overseas (Microsoft brings in just under half of its revenue from foreign countries), because the widgets you sell abroad will suddenly cost more for your customers compared to the widgets you sell in the good ol’ U.S. of A.

Before you say, “Stick it to the man!” remember those companies pay a lot of people a lot of money, who go spend it, etc. etc. You took Econ 101. The point is: It’s another thing that’s not super great for the economy.

The economy may be correcting itself

The Fed isn’t alone in helping slow down the economy. Inflation is starting to wear on consumers and retailers. Walmart (WMT), Target (TGT) and a bunch of other big stores said last month that customers are downsizing their purchases, focusing on necessities. Retailers have been downgrading their profit outlooks as they anticipate those clouds on the horizon will get closer and darker.

America’s electric housing market is showing signs of running out of sparks, too: Mortgage rates are massively higher than they were just a year ago (OK, that’s also kinda the Fed’s fault), driving some prospective homebuyers out of the market. Sales of existing homes in the United States fell for the third-consecutive month in April.

Job growth is also starting to slow just a bit. Although adding nearly 400,000 jobs in a month is great, historically it’s less than the 450,000 to 650,000 jobs America was adding each month last year. May’s jobs total marked the lowest since April 2021. And we still haven’t made up for all the jobs lost in the early days of the pandemic. As the economy continues to bridge that gap, the pace of hiring may slow, because we’re reaching full employment and the job market is naturally running out of steam.

Meanwhile, inflation itself is cooling somewhat. Consumer prices were still 8.3% higher in April 2022 than they were in April 2021, but, hey, that’s less than the 8.5% annual inflation rate in March! So that’s something.

All that other stuff

The problem with the theory that a slowing economy may tame inflation is that government stimulus (both those sweet, sweet stimmy checks and the Fed’s monetary policy) is not solely responsible for the mess we’re in.

Russia is turning off the gas in some European countries while Europe looks to move beyond Russian oil. That has created some energy shortages, sending prices through the roof. The Fed can’t do anything about that unless it’s sitting on an oil well (narrator voice: It isn’t).

Russia’s continued invasion of Ukraine has sent commodity prices soaring, creating a global food crisis. Meanwhile, China has been locking down its major cities to prevent the spread of Covid, turning the world’s second-largest economy southward and exacerbating shortages that have helped drive prices of just about everything higher.

And America’s labor shortage continues to boost wages and has made goods shortages even more worse…er. Suffice it to say, those are problems with no easy solutions.

So what are those doomsayers talking about?

None of this is great news. At the same time, a natural slowdown is fine, if not welcome. The economy has a fever, and the only prescriptions are more rate hikes and more cowbell, in that order.

RSM’s Joe Brusuelas said he was encouraged by Friday’s jobs report for showing signs of economic cooling. And Aneta Markowska of Jefferies told CNN even more contracting would be needed to tame inflation, because wages keep rising, fueling more inflation.

So why all the doom and gloom?

The economic naysayers seem to be hinting at the same thing: We could face a dire situation down the road if we don’t take the correct actions to prevent it.

Labor Secretary Marty Walsh on Friday told CNN there is “no question” a rough economic period is possible and said action must be taken “step by step.” Dimon said an economic “hurricane” is coming – but the question remains whether it would be a rainstorm or a super storm.

As my colleague Julia Horowitz noted in her Before the Bell newsletter Friday: The data is messy, and we’re relying on the Federal Reserve, which has limited ability to control the causes of inflation and a miserable reputation of predicting when to stop raising rates before it plunges the economy into a recession.

Or, in my less elegant words: The economy may be heading down the toilet, and we can only pray no one flushes it.

– CNN’s Matt Egan contributed to this report.