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.
Whatever Ben is smoking, I want some of that.
I thought we already had our two consecutive quarters of negative growth. Am I wrong??
Inflation this bad never ends without a MAJOR recession.
Janet Yellen will tell us she doesn’t understand recession 🤪
With things getting worse by the day...
A recession cannot be avoided.
And after the recession is here officially, things will get much worse.
Things will not get better until Biden and democrats are out of office.
Anyone for waffles?
Just gotta love these experts.
They don’t even have a clue about Econ. 101
Things will not get better until Biden and democrats are out of office.“
Right, in the meantime Joe is “changing lives”
We have had one quarterly report, I think it was -1.4%, later revised to -1.5% IIRC. In July we’ll get the 2Q report which would make a recession official.
I’m leaning towards it being “obvious” that we will get another negative report, the one wildcard being government spending. I know I’m in Frugality Mode at this point, if a decent number of other people are following suit then recession is a sure thing.
At least we may be able to stop any more damage till we have the House, Senate and Presidency.
We’re already in a recession, genius.
And by what measure of Bernanke’s past experience are we to trust Bernanke’s opnion now?
Things HAVE gone bad, and we are nowhere near the bottom yet.
The fit has hit the shan, folks, and there is no place or any time left to duck what is coming.
If we have a parallel in history, look at the storm that took down Herbert Hoover from 1930 on. His defeat in the 1932 election ushered in FDR and the New Deal, and a depression that was worse in 1938 than it was in 1933.
It’s not the landing I’m worried about, it’s the depth of the hole.
Well, with fuel and food prices this high, housing and transportation costs high and an inverted yield curve, recession seems to be a sure thing.
No you don’t. it clearly destroys brain cells.
you don’t want to become a Kool-Aid drinking commie do ya?
This is coming from the guy who said in 2007 that the potential problems coming from the subprime mortgage market would be contained. Shortly thereafter the SHTF.
Biden’s squinty eyed ship is going down in flames!!!
The good news, ammo supply and prices are just about back to normal, time to stock up again!
Well, when you put it that way... NO.
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