Posted on 06/14/2022 2:30:41 PM PDT by blam
Federal Reserve officials have a “decent chance” of avoiding a recession in the United States with a “soft landing,” former Federal Reserve Chair Ben Bernanke said on Sunday.
“The U.S. economy today is a mixed bag,” Bernanke said on CNN’s “Fareed Zakaria GPS” while noting inflation levels that have reached 40-year highs.
“A recession is possible. Economists are very bad at predicting recessions, but I think the Fed has a decent chance, a reasonable chance of achieving what [Fed Chair] Jay Powell calls a ‘soft-ish landing;’ either no recession or a very mild recession to bring inflation down,” he added.
Bernanke pointed to a strong labor market in the United States, saying that “with some luck, and if the supply side improves, the Fed can get inflation down without imposing the kind of costs we saw in the early ’80s.”
The former Fed chair also noted that the central bank “knows it is responsible” for inflation and will take the lead in bringing it down, citing its political support from President Joe Biden and lawmakers in Congress.
Bernanke did, however, note that “some things could go wrong” and said he was counting on the supply chain crisis to improve, adding that there is already “some evidence” that it is.
“I’m hoping and guessing that oil and food prices will at least stabilize and preferably begin to moderate,” he said, while acknowledging that “things could go bad” if the above does not go to plan and inflation persists, leading Americans to start losing confidence in the central bank.
“Then the Fed might have to crack down much harder,” Bernanke said.
Bernanke’s comments come as experts have sounded the alarm on a potential full-blown recession in the United States, despite the Biden administration insisting that inflation is a “top economic priority.”
U.S. annual inflation rate surged to 8.6 percent in May, prompting Biden to tell reporters at a White House press briefing on June 10 that his administration will “continue to do everything we can to lower prices for the American people” while calling on Congress to act fast in passing legislation to cut shipping costs and prices for families for things like energy bills and prescription drugs.
Morgan Stanley projects (pdf) a 27 percent chance of a recession in the next 12 months, up from 5 percent in March, while a recent Bloomberg monthly survey of economists found that the probability of a recession over the next 12 months is 30 percent, the highest since 2020.
In contrast, Goldman Sachs economists said earlier this month that improved inflation figures and adjustments to the jobs market have reduced the risk that the Federal Reserve will have to aggressively raise interest rates to the point that it could force the country into a downturn.
75 basis point rate hike isn’t going to help. Debt spending will suffer.
Maybe 750 basis point may help
“I’m hoping and guessing that oil and food prices will at least stabilize and preferably begin to moderate,” he said...
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Hoping and guessing? Sounds very scientific.
Well strippers are complaining the clubs are not pulling in as many people and their tips have gone down. So yes, we are in a recession. Guys are left watching PornHub or XHamster on their computers.
https://www.indy100.com/viral/market-crash-strippers-recession
There is never a soft landing. Remember when they were telling us that inflation was transitory.
Irrational exuberance!
They’re all lying hacks.
Yeah. “ The subprime mortgage situation will not necessarily affect the greater market “. Yeah right.
I’m surprised that statistic is not one of the economic indicators followed by the Fed!!!! Sounds like that one would be an exceptionally good and reliable indicator!!!!!!
Question is, is it a leading or a lagging indicator?? I would think lagging.
Avoiding recession?
What toilet has Bernake had his head in these last six months?
So we’re in a recession then.
So we’re in a recession then.
“I thought we already had our two consecutive quarters of negative growth. Am I wrong??”
That’s often believed to be the definition of recession but there really isn’t a hard and fast rule. It’s probably close but the NBER actually has a committee that votes on when the business cycle turns.
https://www.nber.org/business-cycle-dating-procedure-frequently-asked-questions
Q: What is a recession? What is an expansion?
A: The NBER’s traditional definition of a recession is that it is a significant decline in economic activity that is spread across the economy and that lasts more than a few months. The committee’s view is that while each of the three criteria—depth, diffusion, and duration—needs to be met individually to some degree, extreme conditions revealed by one criterion may partially offset weaker indications from another.
Officially 1 (& counting).
“If we have a parallel in history, look at the storm that took down Herbert Hoover from 1930 on.”
1930 began a cascading series of bank failures that shrank the U.S. money supply by 30%. There’s nothing remotely like that going on right now.
What we do have is a replay of Carter era inflation and energy shortage.
The real numbers come out in early July, they’re going to be disastrous.
Nope. I don't think we have a chance. Look at the below linked article:
…AVOIDING recession?!?!?
What da HECK do they think we are in NOW???
1st quarter 2022 WAS NEGATIVE already at -1.5% GDP. April and May 2022 have both been negative across the board for everything. Maybe not 1.5 negative, but certainly not “positive GDP “ better than January to May.
So, how will they avoid two negative quartets, with only 14 days left in June to gain back +1.5% for these past 90 days?
That’s what I see also. -2% GDP is possible. Probable. Unless theycook the books for the democrats, then rewrite them later.
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