Is a recession inbound right now? Given the sky-high cost of fuel, the rampant inflation that has made everything from used cars to cheese painfully expensive, the chaos abroad, the collapse in America’s stock market, the huge jump in mortgage rates, and other worrisome factors, it sure looks like something is on the horizon.
Hence why analysts at some of America’s top banks are ringing the alarm bells over the economy, with Bank of America analysts saying, for example:
“Our worst fears around the Fed have been confirmed: They fell way behind the curve and are now playing a dangerous game of catch up. We look for GDP growth to slow to almost zero, inflation to settle at around 3% and the Fed to hike rates above 4%.”
That team pegged the risk of recession at 40%, meaning that while it’s far from certain, there’s certainly cause for worry that the economy could take a nosedive in the coming months. Or, as Bank of America put it “‘Inflation shock’ worsening, ‘rate shock’ just beginning, ‘recession shock’ coming.”
So, even if America’s growth will merely slow and there is no recession, there is still major cause for worry and concern, as the economy is looking far from strong right now, particularly in the financial realm.
But that’s not what one of Biden’s top economic advisors, Heather Boushey, said when asked about the threat of a recession. She, speaking on the issue, said not to worry because the United States is in a “relatively strong position” and because the economy has weathered past storms, saying:
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“Well, because family balance sheets are strong, because we been able to get the unemployment rate down, we’re starting from a relatively strong position right now, so — and because we’ve seen the economy able to weather some of these storms that have come over the past year.
“That gives us some confidence that should oil prices continue to be high or maybe go up, which would be horrible, but we think that there’s enough wiggle room that businesses and families will be able to make it through because they have resources to fall back on.”
Strong relative to what? Venezuela and Zimbabwe?
That wasn’t all. Boushey also said, during the same, Washington Post-hosted event, that she’s “optimistic” about the current state of things, saying:
“It’s part of the job description to worry about when the next recession will happen. But … right now we remain optimistic that we will not have to see something that will lead to the kinds of scarring of American families that we really don’t want to see.”
Meanwhile, though Boushey thinks businesses and people have enough “wiggle room” to survive whatever is wrought by Biden’s presidency, Reuters reports that “U.S. household debt rose to a record $15.84 trillion in the first quarter”, so there is certainly some economic cause for concern that families will find harder and harder to ignore as their debt burdens grow all the more onerous.