Photo: PAUL J. RICHARDS / AFP / Getty Images
In the midst of the inflationary peak that the United States economy is going through, the former governor of the Federal Reserve (Fed) Roger Ferguson warned of the arrival of an “almost inevitable” recession in the country for 2022.
After the Department of Commerce’s Bureau of Economic Analysis revealed that US gross domestic product contracted at an annualized rate of 1.4% between January and March, Ferguson said there is a greater chance of 50% of experiencing a general decline in economic activity.
“I think a recession, at this stage, is almost inevitable. The probability of a recession in 2023 is certainly very, very high, due to the challenges of controlling this raging inflation and having few tools to control the supply side of the economy,” he told CNBC.
The former Governor of the Fed, from 1996 to 2006, warned of indicators of a growing global economic weakness that has even been reflected in other countries such as China. “The rest of the world is also slowing down quite dramatically,” he said.
Given the signs of a slowdown, Ferguson said that in the country the Fed is forced to continue raising rates . The Fed is expected to raise interest rates by 04 points next Wednesday, above the quarter point announced in March.
The measures that the Federal Reserve has taken to combat inflation led to Deutsche Bank, to forecast in early April a recession looming in the country in late 2023 and early 2024 with unemployment greater than 5% . Weeks later he said that the recession will be much worse than estimated.
Ferguson’s forecast also coincides with that of Goldman Sachs, of 05% chance of having a recession in the next two years.
Given the economic scenario, Treasury Secretary Janet Yellen has said that she does not see a recession in sight in the country. For his part, US President Joe Biden said that the country’s economy is “resilient in the face of several historic challenges.”
It may interest you:
-What is a recession: three economic signs that help identify it
-Announced that the US economy shrank 1.4% in the first quarter of 2022: the door of the anticipated recession?
-There is no recession in sight in the US, says Treasury secretary