Recession: Biden acknowledges ‘mild recession’ is possible, even if he doesn’t think it will happen



CNN

President Joe Biden told CNN’s Jake Tapper on Tuesday that the prospect of a “mild recession” is possible but he is not anticipating it – even as experts sound the alarm over the future of US and world economies.

“I don’t think there will be a recession. If so, it will be a very mild recession. Which is to say, we’re going to go down slightly,” Biden told Tapper in his first exclusive interview with CNN since taking office, later adding, “It’s possible. Look, it’s possible. I don’t anticipate it. »

Investors, economists and banks, however, are all warning that the United States is likely to slip into a recession in the coming months.

Shares fell on Monday after JPMorgan Chase CEO Jamie Dimon warned that the United States was likely to enter a recession within the next six to nine months. And last month, 72% of economists polled by the National Association for Business Economics said they expected the next US recession to start in the middle of next year – if it hasn’t already started.

Bank of America said this week that the Federal Reserve’s fight to crush inflation by continuing to aggressively raise interest rates will result in the loss of tens of thousands of jobs per month in the US economy from the start. next year.

Worries about inflation — and the increased likelihood of even bigger interest rate hikes from the Federal Reserve — spooked Wall Street again and pushed long-term bond yields higher. And although it doesn’t last long, gas prices continue to rise in most of the United States.

Meanwhile, globally, the International Monetary Fund has once again downgraded its forecast for the global economy with a stern warning: “The worst is yet to come, and for many people, 2023 will look like a recession”.

All of the world’s biggest economies are slowing down, IMF Managing Director Kristalina Georgieva said last week, noting Europe’s energy crisis amid Russia’s war in Ukraine, China’s housing slump and historically high inflation in the United States.

The president hinted on Tuesday that the United States’ ability so far to stave off a recession despite forecasts that caused widespread concern gave him some confidence in the economy’s future.

“Every six months they look at the next six months and say what is going to happen. That hadn’t happened yet,” Biden said, adding that “they’ve predicted that from time to time.”

He also pointed to his administration’s legislative achievements to help reduce costs, saying, “We are in a better position than any other major country in the world, economically and politically.”

Specifically, he referred to the provisions of the Inflation Reduction Act. The law, signed into law in August, includes major health policy changes by giving Medicare the power for the first time to negotiate the prices of certain prescription drugs and extending expiring health care subsidies for three years.

“I mean…so much has been accomplished that the idea that…there is an automatic recession is just…not there,” Biden noted. He later conceded that Americans “have reason to be concerned about energy prices. They are right to be concerned about a whole series of issues. But look what we did.

With the midterm elections less than a month away, Biden also argued Democrats had something to do despite the economic woes, saying Republicans “are going to raise drug prices, raise medical costs, be sure that we will no longer be able to have the possibility of having tax credits to weatherize your house, save money. I mean, I don’t know what they’re for.

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