Examining the past four US recessions and five big bank-centred financial crises in other countries, in this week’s lead piece, we try to gauge the depth and duration of the recession in the US, the Fed’s policy response relative to the past, and implications for inflation. We find some striking similarities, but also important differences between recessions led by financial crises and past US recessions. The directions of output, inflation, credit growth and bond yields suggest that there is likely to be more pain ahead across the board. The Fed’s actions will likely succeed in keeping the US from going into a deep recession. However, this monetary easing is more aggressive than historical precedents and will likely spill over into higher inflation, pulling bond yields higher.