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Politico published an article Monday that warned that despite President Joe Biden’s attempts to reassure the public and investors that a recession is not inevitable, “it’s an increasingly lonely voice.”
“From Wall Street to Washington, whispers about the upcoming economic recession have risen to nearly a roar as the Federal Reserve mounts its battle against the highest inflation in four decades,” wrote Victoria Guida, economics correspondent. in Washington.”
Many in finance and the media have warned of a possible recession for months, with Bloomberg publishing an article in May arguing that The Fed is likely to anticipate a recession at that time.
“Fed Chairman Jerome Powell is starting to say the quiet part out loud,” he wrote well. “The central bank is prepared to take on a recession if that means controlling inflation.”
“While Biden has publicly supported Powell’s efforts, raising expectations of a recession is exacerbating the administration’s economic problems as Democrats approach this year’s congressional elections,” she continued.
President Biden has publicly stated that a Recession is not inevitable. “There’s nothing inevitable about a recession,” Biden said when asked by a reporter last month. “Don’t make things up,” he told the journalist.
However, Politico reports contradict Biden’s rhetoric on inflation. “Across the country, the main topic of economic conversations – high inflation – is rapidly turning into a growing certainty of the next recession,” she wrote. “White House The allies are preparing for it. Republican lawmakers say deflation is inevitable.”
As for leaders in finance and industry, “Wall Street analysts are increasingly building in their forecasts. Business leaders have quickly moved from silent fears to public chatter about an economic recession during investor discussions and within their companies.”
“Alarming questions loom: Does the US need a recession to tame inflation? When will that happen? Will the Federal Reserve continue to raise interest rates even if the country enters a recession until inflation subsides?”
“Michael Feroli, chief US economist at JPMorgan Chase, said the recession could start as soon as this quarter, with recent data showing that consumer spending – the biggest driver of GDP – is starting to slow,” she wrote.
Ghida noted Feruli said, “It feels like we’re losing altitude very quickly.”
“Last week, the government confirmed that the economy contracted in the first three months of the year – and the Atlanta Fed’s economic growth tracker points to increased chances of deflation in the second quarter,” she wrote.
Inflation and a slowing economy could take a toll on Democrats in 2022 midterm electionsCritics say.
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