Faced with the "recession warning" issued by many economic industry insiders, International Monetary Fund also lowered its global economic growth expectations, but the United States is still stubborn, White House insisted that "the US economy will not fall into recession." On October 11, local time, US President Biden accepted an exclusive interview with Jake Tapper, anchor of CNN. Biden said he does not think the US economy will experience a recession, and even if it occurs, it will be "very slight". After Tapper questioned, Biden then said that the recession was "possible", but he was not expected to appear.
Don’t look at Biden’s stubbornness, in terms of the current international situation and the specific problems facing the United States, important international economic organizations and economists believe that the United States will enter a recession. On October 10, CEO of JPMorgan Chase (JPMorgan Chase) warned that the European economy has fallen into recession, and that "very, very serious" adverse factors may cause the US and global economies to fall into recession in the middle of next year, that is, six to nine months later. Perhaps it is precisely because such economists have given a specific time period that will allow US President Biden to stand up and clarify that the US economy will not decline.
In fact, at an investor summit held by the US consumer news and business channel (CNBC) on September 28, the world-renowned hedge fund Castle Group (Citadel) CEO of Ken Griffin said that the US economy will fall into recession, and the question is only when it will happen, and this time point may be as early as next year. Bank of America said this week that the Federal Reserve's move to hike interest rates to curb inflation will cause the U.S. economy to lose tens of thousands of jobs a month starting from the beginning of next year. Obviously, the judgment of economic experts and banks is also based on the United States' continuous interest rate hikes and the uncertainty of the world's economic outlook that it believes that the United States will enter an economic recession.
Ken Griffin
Just as many economists believe that the United States will fall into an economic recession, the International Monetary Fund (IMF) released the latest issue of the " World Economic Outlook Report " on October 11. The report predicts that the global economy will grow by 3.2% in 2022, the same as the July forecast; the global economic growth rate will further slow to 2.7% in 2023, down 0.2 percentage points from the July forecast. According to the IMF's forecast report, the U.S. economy forecasts growth in 2022 to be 1.6%, while it will drop to 1% in 2023. Obviously, this expresses a not optimistic view on the U.S. economy. The IMF issued a sharp warning: "The worst situation has not yet arrived. For many people, 2023 will be a recession."
Obviously so many economists and organizations have given affirmative answers to the world and the United States' future economic recession, which is definitely not a good phenomenon for the United States. You should know that the Federal Reserve is now entering the interest rate hike cycle on a large scale, with each interest rate hike frequency being 75 basis points. Currently, the U.S. federal funds rate has increased to between 3% and 3.25%, which is already at a historical high. Moreover, new forecasts show that by the end of this year, the federal funds rate will rise to the range of 4.25% to 4.50%, which also means that the Federal Reserve will continue to raise interest rates, and will rise to between 4.50% and 4.75% by the end of 2023. Although such a high fund interest rate will help the United States solve the inflation problem to a certain extent, its side effects are also obvious. Ken Griffin believes that the United States should continue to implement monetary tightening policies, but also admits that the Fed can do very little to curb inflation. After all, a large amount of interest can indeed attract the return of the dollar from all over the world to help the United States supplement its operating losses. But the problem is that high interest rates will also put American small and medium-sized enterprises in the dilemma of no funds available. Once a large wave of bankruptcies in the United States breaks out and a large-scale bankruptcy wave will inevitably lead to a large-scale rise in the United States.It is precisely based on such concerns that Bank of America said this week that the Fed's continued massive rate hikes to curb inflation will cause the U.S. economy to lose tens of thousands of jobs a month from the beginning of next year.
At present, the Biden administration does not want to admit that the United States may experience an economic recession in the future. In fact, this is directly related to the Democratic Party's rule over the United States. If the Biden administration does not suppress inflation in the economic field, or does not have a reversal effect on the US economy, then the US economy will inevitably be extremely embarrassing in the book information. The midterm elections will be held in the United States in November, and the Democratic Party’s election situation is not optimistic. If Biden acknowledges that the United States will fall into an economic recession in the future, will American voters still be willing to stand up and support the Democratic Party? Obviously the answer is no. Even if Biden knows that the United States will enter a recession in the future, Biden will definitely not admit this trend at this time.
U.S. Treasury Secretary Yelen said on September 22 that domestic inflation in the United States will "definitely" drop next year, and the "path" that neither significantly increases the unemployment rate nor reduces inflation exists, so the unemployment rate will not increase significantly. Obviously, Yellen's statement is naturally an endorsement of the Biden administration's policy of suppressing inflation, and naturally it also negates that the US unemployment rate will increase significantly. Yellen insists that the US economy will not fall into recession, which is obviously a stand-in for the Democratic Party. After all, once the Democrats lose in the midterm elections between the two houses, Biden's remaining two years of work will be extremely difficult, which is what Biden wants to see the least, and what the Democrats do not want to accept. (The pictures in this article are from the Internet)
