Or, in the words of Johan Grahn, the head of ETF strategy at $19.5 billion Allianz Investment Management, it was "not necessarily earth-shattering." "There's no doubt that they will have to strangle the economy," Grahn said of the US central bank in an interview with Insider on Wednesday afternoon. Consequences of higher rates include lower corporate earnings and stock valuations, slower growth, and a higher unemployment rate. But hoping for higher unemployment at the expense of lower inflation could easily backfire, Grahn warned, just like the US central bank's plan to get higher inflation while bringing down unemployment did. How to invest as recession risk risesInvestors can manage risk in their portfolios as inflation stays hot and the economy weakens by using a buffer strategy, Grahn said.

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