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Politico published an article Monday warning 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 of an impending economic downturn have turned almost to roars as the Federal Reserve ramps up its fight against the highest inflation in four decades,” wrote economics reporter Victoria Guida in “No More Whispers: Recession Talk Surges “. in Washington.”
Many in finance and the media have been warning of a possible recession for months, with Bloomberg publishing an article in May arguing so The Federal Reserve was probably anticipating a recession back then.
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President Biden addresses inflation and supply chain issues at the Port of Los Angeles in Los Angeles on Friday, June 10, 2022.
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“Fed Chair Jerome Powell has started saying the quiet part out loud,” Guida wrote. “The central bank is willing to tolerate a recession if it means controlling inflation.”
“Although Biden has publicly backed Powell’s efforts, rising expectations of a recession are compounding the administration’s economic woes as Democrats head into the congressional elections this year,” she continued.
President Biden has publicly stated that a recession is not inevitable. “A recession is not inevitable,” 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 coverage contradicts Biden’s rhetoric on inflation. “Across the country, the leading theme of economic talks – high inflation – is rapidly morphing into the growing certainty of a coming recession,” she wrote. “The White House allies are preparing for this. Republican lawmakers are trumpeting that a downturn is inevitable.”
As for leading financial and industrial companies, “Wall Street analysts are increasingly building this into their forecasts.
Guida noted that “Foreshadowing questions are: Does the US need a recession to tame inflation? How soon?
“Michael Feroli, chief US economist at JPMorgan Chase, said a downturn could begin as early as this quarter, with recent data showing that consumer spending — the biggest driver of GDP — is beginning to ease,” she wrote.
FILE PHOTO: U.S. President Joe Biden announces the appointment of Federal Reserve Chairman Jerome Powell for a second four-year term and Federal Reserve Board Member Lael Brainard as alternates in the South Court Auditorium of the Eisenhower Executive Office Building at the White House Chairman Known in Washington, U.S., November 22, 2021. REUTERS/Kevin Lamarque/File Photo
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Guida noted that Feroli said, “It looks like we’re losing altitude pretty quickly.”
“The government confirmed last week that the economy contracted for the first three months of the year — and the Atlanta Fed’s economic growth tracker points to increased chances of a contraction in the second quarter,” she wrote.
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