US Recession Is Avoidable If Fed Is Able to ‘Thread the Needle’ – Bloomberg
The US economy is strong, and it has more than $2 trillion in excess cash on household balance sheets. A recession is unlikely in the immediate future, but it could happen next year if the Federal Reserve succeeds in reining in surging prices.
Biden urges economic confidence despite inflation challenge, but says it will be “very tight” because risks are high.
Recessions are characterized by high unemployment, low or negative GDP growth, falling income, and slowing retail sales. The symptoms vary widely, and are difficult to forecast.
A recession would cause thousands of jobs to be lost and trigger another downdraft in the stock market, further damaging the economy and President Biden.
The economy is starting to show cracks, with the housing market buckling under the impact of a big jump in mortgage rates engineered by the Fed. Some corporate chieftains are working the worry beads, but the risk of recession remains low.
Megan Greene, global chief economist at the Kroll Institute, said recession concerns are premature because consumers still have financial firepower and the number of employed people is still rising.
Bloomberg’s economists predict strong household and corporate balance sheets will keep growth positive for the next 12 months.
“Consumers are in good shape,” said Bank of America CEO Brian Moynihan. “I don’t think we’re going into recession in the next 12 months.”
Oxford Economics chief US economist Kathy Bostjancic sees 35% chance of recession in 2023, but says an unwinding of supply-chain strains and an influx of workers into the labor force will help alleviate inflationary pressures without requiring economy-breaking Fed tightening.
Some economists are more pessimistic about the outlook, but JPMorgan Chase CEO Jamie Dimon warned of a looming economic “hurricane” this week.
For more information, consider the following news outlets listed below.
- US Recession Is Avoidable If Fed Is Able to ‘Thread the Needle’ Bloomberg
- What the next economic recession may look like? Fox Business
- U.S. recession imminent, inevitable? Not if the Fed is able to ‘thread the needle’ Fortune
- Is the Economy Really That Bad Now? Here’s What History Tells Us CNET
- Market downturn hits tech with layoffs, stock plunge, slower funding Business Insider