Economists Warn of Looming Recession
With inflation at a 40-year high, economists are sounding the alarm that the U.S. is heading for a recession. Despite President Biden’s past claims that inflation is “transitory,” an “upper class problem,” and something that could simply be solved if businesses charged customers less, price increases continue to hammer working families. The Federal Reserve is now forced to fix Bidenflation by raising interest rates — another cost for working families who must borrow for mortgages, auto financing, and student loans – which could set the stage for a recession.
Experts are worried:
President Biden’s own preferred economic forecaster, Moody’s Analytics Chief Economist Mark Zandi:
“Recession risks later this year and into next are now uncomfortably high.”
“The odds that the Fed missteps, and tightens too aggressively are material and rising. Landing the economic plane on the tarmac was already going to be difficult for the Fed because of the pandemic and high inflation, but Russia’s invasion makes it more likely the economic plane hits the tarmac hard or even crashes.”
Former Obama-Biden Treasury Secretary Larry Summers:
“Ex-Treasury Secretary Lawrence Summers, meanwhile, put the chances of a near-term recession—within the next 30 months—at above 50% because ‘the Fed has allowed itself to get far further behind the curve’ in battling inflation.”
“‘Overall, the economic outlook is unusually murky […] While there are many reasons to be optimistic about the U.S. economy’s near-term prospects, there are also reasons to worry that a recession isn’t far off,’ economist Ryan Sweet of Moody’s Analytics wrote in mid-February. Reasons for worry include ongoing supply-chain disruptions, rising interest rates and purchasing challenges at big companies. ‘The odds of something going wrong are high,’ he concluded.”
Chief Economist at Grant Thornton LLP Diane Swonk:
“The Fed has never really chased inflation successfully without having precipitated a recession, yeah.”
As reported by Forbes, Former Director of the National Economic Council Lawrence Lindsey:
“The central bank now has to play catch-up to fight inflation, which has proven to be worse than expected, putting the odds of a recession by the end of 2023 at over 50%, according to former Fed Gov. Lawrence Lindsey, who served in the George W. Bush Administration.”
Chief Investment Strategist at Bank of America Michael Hartnett:
“In the ‘next six months, rates shock morphs into recession shock,’ BofA strategists, led by Michael Hartnett, wrote in a commentary [that] this could upend the economy […] ‘Recession risks [are] rising.’”
READ: American Workers Are Stretching Dollars To Keep Up With Bidenflation
Key Background:
Inflation skyrocketed after President Biden’s “COVID stimulus” forced small business owners to raise prices as government spending increased their costs, a worker shortage left them desperate for workers, and looming tax hikes threatened their futures.
Now with a recession looming, working families who lost wages under the Biden Administration are now at risk of losing their jobs. Americans’ economic security is at risk during a period of heightened uncertainty in national security that is forcing workers to pay even higher gas prices.
As Republican Leader Kevin Brady (R-TX) warned:
“The basis of it all right now continues to be massive government spending that fuels inflation and not enough workers because of the policies of President Biden.
“I worry that we are either on the verge of – or in – a wage price spiral, which is something you don’t want, because inevitably the only way to break that spiral is through a recession.”