White House says concerned about recession but US economy strong

White House says concerned about recession but US economy strong

White House says concerned about recession but US economy strong

White House says concerned

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  • Cecelia Rouse, director of Biden’s Council of Economic Advisers, says the bones of the U.S. economy are solid.
  • The Fed last week implemented its third interest rate hike this year.
  • Richmond Federal Reserve Bank President Thomas Barkin believes inflation concerns will be resolved soon.
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The American economy remains healthy, but a White House economist admitted Tuesday that President Joe Biden’s administration is concerned about a looming recession.

As inflation surges at the fastest rate in more than four decades, gas and home prices soar, and the Fed hikes interest rates to slow the economy, Americans fear a devastating downturn.

Cecelia Rouse, director of Biden’s Council of Economic Advisers, stated on CNBC that despite a first-quarter loss, the labour market and consumer spending are in good shape.

Read More: Ambassador of Pakistan Masood Khan meets US president at White House

“When we look at recession (risks) … that’s obviously a concern, but the bones of our economy are solid,” she said, noting that the United States is better positioned to face the challenges than most other nations.

On Sunday, Treasury Secretary Janet Yellen also tried to quell recession fears, saying a downturn is not “inevitable” even while the economy will slow as it “transitions to stable growth.”

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Rouse said Biden is focused on the inflation challenge, which is mostly related to the Covid-19 pandemic: “It’s not easy to turn back on a global economy.”

Global supply chain snarls have fueled price increases, while epidemic lockdowns in China add to the uncertainty.

Read More: US economy slowed slightly more in Q1: govt

But Russia’s invasion of Ukraine was a “game-changer,” she said.

“We all hope the Fed can get inflation under control without ceding too much on maximum employment,” Rouse said “We all hope for the longed-for soft landing.”

The Fed last week implemented the third interest rate hike this year, the biggest in nearly 30 years, and promised more big increases in the coming months.

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Richmond Federal Reserve Bank President Thomas Barkin said Tuesday it was not yet clear how fast and how far the central bank will have to move.

Read More: White House: The US will continue to support Ukraine in order to put it in the “strongest possible position”

Policymakers “will be nimble, and we will be data-driven,” he said during a discussion with the National Association for Business Economics.

“You want to get back to where you want to go as fast as you can without breaking anything,” he said.

However, he stated that he believes the supply chain concerns will be resolved soon, lessening inflationary pressures.

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