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Politico published an article on Monday that warned that despite President Joe Biden’s attempts to reassure the public and investors that a recession is not inevitable, “He is an increasingly lonely voice.”
“From Wall Street to Washington, whispers about a coming economic collapse have become almost a roar as the Federal Reserve steps up its battle against the highest inflation in four decades,” wrote business journalist Victoria Guida. in “No More Whispers: Recession Talk Surges in Washington.”
Many financial and media players have been warning for months of a potential recession, with Bloomberg publishing an article in May claiming that the The Federal Reserve probably expected a recession at the time.
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President Biden speaks about inflation and supply chain issues at the Port of Los Angeles, Friday, June 10, 2022, in Los Angeles.
((AP Photo/Damian Dovarganes))
“Fed Chairman Jerome Powell started saying the quiet part out loud,” Guida wrote. “The central bank is ready to tolerate a recession if it means controlling inflation.”
“While Biden has publicly backed Powell’s efforts, rising expectations of a recession are compounding the administration’s economic woes as Democrats head into congressional elections this year,” 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 invent anything,” he told the reporter.
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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 reporting contradicts Biden’s rhetoric on inflation. “Across the country, the main topic of economic conversation – high inflation – is rapidly turning into growing certainty of a coming recession,” she wrote. “White House allies are bracing for it. Republican lawmakers are trumpeting that a downturn is inevitable.”
As for finance and industry leaders, “Wall Street analysts are increasingly factoring it into their forecasts. And business leaders have quickly moved from muted fears to open discussions about an economic meltdown during discussions with investors and within their companies”.
Guida noted that “ominous questions loom: Does the United States need a recession to bring inflation under control? How long ?
“Michael Feroli, chief U.S. economist at JPMorgan Chase, said a slowdown could even start as early as this quarter, with recent data showing consumer spending – the main driver of GDP – starting to slow,” he said. she writes.
FILE PHOTO: US 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 -President, in the South Court auditorium of the Eisenhower Executive Office Building at the White House in Washington, U.S., November 22, 2021. REUTERS/Kevin Lamarque/File Photo
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Guida noted that Feroli said, “Things seem like we’re losing altitude pretty quickly.”
“The government confirmed last week that the economy contracted in the first three months of the year – and the Atlanta Fed’s economic growth tracker points to increased odds of a contraction in the second. quarter,” she wrote.
Inflation and a slowing economy may negatively affect Democrats in the 2022 midterm electionssay the experts.
