President Joe Biden’s administration is turning a blind eye to the reality of a recession. In just the past 48 hours, Biden’s Treasury Secretary and Economic Adviser have completely contradicted headlines.
“Recession fears roil markets amid Fed’s inflation fight” and “Deutsche Bank now expects ‘an earlier and somewhat more severe recession,” writes Yahoo Finance.
“Recession Probability Soars as Inflation Worsens” was the Wall Street Journal’s Sunday title.
On Monday, Bloomberg reports, “US Recession This Year Now More Likely Than Not, Nomura Says.”
From Forbes: “Another Major International Bank Forecasts Recession In The U.S.”
But President Joe Biden’s economic advisers, and their optimism, delusion or perhaps just attempt to mislead the public, is more indicative of working for a President facing reelection, rather than reality. Speaking to CBS’s Face the Nation on Sunday, National Economic Council director Brian Deese claimed a recession is “not inevitable.”
“Not only is a recession not inevitable, but I think that a lot of people are underestimating those strengths and the resilience of the American economy,” Deese said. The strengths he is assuming are an increase in household savings and lower amounts of people not paying payments on mortgages and credit cards.
Despite his remarks, Deese blamed “unprecedented global circumstances, a global pandemic and a war in Europe” for impacting the global economy. “But at the same time, we have a strategy that will make a difference.”
“We have been through Delta and Omicron…We’ve had a war in Europe and all of the impacts that that has had, and through it, the American economy has remained resilient. What we want to focus on now is taking every step we can to continue that progress,” Deese added.
Treasury Secretary Janet Yellen has also relayed conflicting messages on inflation, but lifting up her boss saying earlier this month that she does not believe there will be a recession because “consumer spending is very strong. Investment spending is solid. I expect growth to slow down.”
“We have a very strong economy. I know people are very upset — and rightfully so — about inflation. But there’s nothing to suggest inflation if a recession is in the works,” Yellen added.
National Review reminds us that despite Biden’s team, “Economic analysts predict a recession may be imminent given that the Federal Reserve has started to reverse its accommodative monetary policy. The Fed announced last week it would hike its benchmark interest rate by 0.75 percent, marking the largest singular increase since 1994.”
On Sunday, Yellen echoed Deese’s sentiments on This Week: “I expect the economy to slow…It’s been growing at a very rapid rate. … The labor market has recovered, and we have reached full employment.”
“It’s natural now that we expect a transition to steady and stable growth,” she added.
Last week, former Treasury Secretary Lawrence Summers predicted a recession will hit the United States in the next two years. National Review reported on a ‘C-Suite Outlook 2022’ Poll found that “more than 60 percent of CEOs around the world are expecting a recession before the end of 2023.”