President Joe Biden is in denial about what is happening around the country. However, we knew that the inflation would lead to a recession.
When asked about it, he likes to play the name game. He said that it’s only a word, and we can call it whatever we want. He claims that he’s more concerned about how Americans will be affected by the economic climate.
Well, guess what? Economists are calling it a recession. The only thing that they can’t agree on is whether it’s already in place or whether it’s going to hit within the next few months.
Buckle up. It’s going to be a bumpy ride.
The National Association of Business Economics (NABE) conducted a survey to find out what is going on with the economy. Since the Federal Reserve has been unsuccessful in taming inflation without talk of a recession, we’re hit with a hard reality.
72 percent of economists who were surveyed said that they expect that there will be a U.S. recession by the middle of next year, though some say it has already started.
The problem is that economists are all over the board about the outlook – and that’s what makes this so unusual. Approximately 19% of economists say that the country is already in a recession. Meanwhile, 20% say that we won’t see a recession until mid-year 2023.
David Altig, NABE President said, “Survey results reflect many split opinions among the panelists. This by itself suggests there is less clarity than usual about the outlook.”
Jerome Powell, the Chairman of the Federal Reserve, spoke during a press conference last month regarding the inflation and likelihood of sparking a recession. Unfortunately, even he has lost his confidence about whether there is a path that can be taken to get inflation under control.
Drastic interest hikes have happened as a way to get inflation to drop. And those interest rates are causing problems within the housing market.
There seems to be one thing that most of the economists can agree on when they took the NABE survey. 73% claim that they are not very confident that the Fed can get inflation down to their 2 percent goal without causing a recession.
The Inflation Reduction Act was recently passed, though there’s also very little confidence that the partisan legislation can do what it claims it will do. Bernie Sanders has been extremely outspoken about the bill signed by his Party, saying that it won’t do anything to reduce inflation.
Still, 76% of those who took the survey believe that it will do something to help inflation – particularly with the 15% minimum corporate tax and the healthcare subsidies.
Time will tell whether we’re able to rely on the Democrats to do something helpful.
Meanwhile, we’re still dealing with gas that is higher than it was when Trump was in office. Groceries are ridiculously expensive. Utility costs are higher. Oh, and for those who aren’t locked into a fixed-rate mortgage, rates are going up. And rent for those who are in apartments and rental properties.
People aren’t spending what they used to – and that means that a recession is bound to happen.
It’s not an “if” at this point. It’s a “when.” Get your finances in order because it could be a problem for the next two years. Let’s just hope that we can ditch the Democrats in the midterm elections so that we can turn things around a bit faster.