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Despite President Joe Biden’s efforts to reassure the public and investors that a recession is not imminent, “He is an increasingly lonely voice,” Politico published an article Monday.
“Whispers of a looming economic recession will almost be humming from Wall Street to Washington as the Federal Reserve steps up its fight against the highest inflation in four decades,” writes economics reporter Victoria Guida in “No More Whispers: Recession Talks Rise.” “In Washington.”
Many financial and media outlets have warned of a potential recession for months, with Bloomberg publishing an article in May, The Federal Reserve probably expected a recession that time.
President Biden speaks on inflation and supply chain challenges at the Port of Los Angeles, Friday, June 10, 2022.
((AP Photo/Damian Dovarganes))
“Fed Chairman Jerome Powell started saying the quiet part loudly,” Guida wrote. “The central bank is willing to endure a recession if it means getting inflation under control.”
“While Biden has publicly supported Powell’s efforts, recession expectations add to the administration’s economic challenges as Democrats head into congressional elections this year,” he said.
President Biden made it clear that a recession is not inevitable. “There’s nothing inevitable about a recession,” Biden told a reporter last month. “Don’t make things up,” he told a reporter.
DEMOCRATIC GOVERNOR DESCRIBES ECONOMIC RECOVERY, SAYS ‘BRING IT’
WASHINGTON – JANUARY 22: The Federal Reserve Building is seen on January 22, 2008 in Washington, DC. (Photo by Chip Somodevilla/Getty Images)
However, Politico’s report contradicts Biden’s inflation rhetoric. “A leading topic of economic conversation across the country — high inflation — is quickly becoming a growing certainty of an impending recession,” he said. “White House allies are preparing for it. Republican lawmakers say recession is inevitable.”
As for financial and industry leaders, “Wall Street analysts are increasingly fitting it into their forecasts. And business leaders have quickly moved from silent fears to openly talking about an economic downturn during investor discussions and within their companies.”
The guide noted that “the questions loom large ahead of time: Does the U.S. need a recession to tame inflation? How soon? Will the Fed continue to raise rates if the country slips into recession until inflation recedes?”
“A recession could even begin this quarter, with recent data showing that consumer spending, the biggest driver of GDP, is beginning to slow,” said Michael Feroli, chief U.S. economist at JPMorgan Chase.
FILE PHOTO: U.S. President Joe Biden announces the nomination of Federal Reserve Chairman Jerome Powell for a second four-year term and Federal Reserve Board member Lael Brainard as vice chairman in the South Court Auditorium of the Eisenhower Executive Office Building at the White House. In Washington, USA, November 22, 2021. REUTERS/Kevin Lamarque/File Photo
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“Everything looks like we’re losing altitude very quickly,” Feroli said, the guide noted.
“The government confirmed last week that the economy shrank in the first three months of the year — and the Atlanta Fed’s economic growth tracker shows a growing chance of contraction in the second quarter,” he said.
Inflation and a slowing economy could hurt Democrats 2022 midterm electionsexperts say.
