Fed Chair Jerome Powell answers questions from reporters after the central bank announced an additional 25 bps hike in July. For access to live and exclusive video from CNBC subscribe to CNBC PRO:
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BREAKING: Recession News
LEARN MORE ABOUT: Bank Failures
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Since taking over as the Federal Reserve Chair in 2018, Jerome Powell has been navigating the US economy through various challenges, including trade disputes, geopolitical tensions, and most recently, the COVID-19 pandemic. Powell’s leadership and decision-making have come under close scrutiny, particularly during recessions and crises. However, with recent developments, it appears that the Fed staff is no longer forecasting a recession.
The Federal Reserve staff plays a crucial role in predicting economic trends and providing valuable insights to guide monetary policy decisions. Over the years, their forecasts have been highly regarded and have often influenced the Fed’s actions. In recent months, their assessments have taken a significant shift.
In the wake of the COVID-19 outbreak, the US economy experienced an unprecedented contraction, leading some economists to predict a prolonged recession. However, the latest projections from the Fed staff indicate a more optimistic outlook. Despite the ongoing challenges, they are no longer forecasting a recession, suggesting a potential recovery in the near future.
Several factors have contributed to this change in perception. First and foremost, the implementation of effective vaccine distribution plans has lifted hopes for a return to normalcy. As more and more people are getting vaccinated, consumer confidence is growing, resulting in increased spending and economic activity. This positive shift in sentiment is a significant factor behind the Fed staff’s change in forecast.
Additionally, the federal government’s commitment to providing substantial fiscal stimulus has also played a critical role in mitigating the economic downturn. The passage of the American Rescue Plan Act, injecting trillions of dollars into the economy, has provided much-needed support to struggling households and businesses. This injection of funds, coupled with a successful vaccination drive, has bolstered the economy’s resilience and created a more favorable environment for growth.
Furthermore, the Federal Reserve’s monetary policy has been instrumental in ensuring financial stability and supporting economic recovery. Under Powell’s leadership, the central bank has maintained an accommodative stance, keeping interest rates near-zero and implementing various asset purchase programs. These measures have provided liquidity to financial markets, keeping borrowing costs low, and promoting investment.
However, it is essential to approach these changing forecasts with caution. Uncertainties and risks still remain, and the path to complete recovery may encounter bumps along the way. The resurgence of new virus variants or delays in vaccine distribution could pose challenges to the optimistic projections. This is why Powell and the Fed remain vigilant in their monitoring and stand ready to adjust policies if necessary.
Overall, the fact that the Federal Reserve staff is no longer forecasting a recession is a positive sign for the US economy. The combination of successful vaccination efforts, substantial fiscal stimulus, and accommodative monetary policy has provided a solid foundation for growth. While challenges persist, the overall outlook is encouraging. Powell’s leadership during these tumultuous times has proved effective, and his ability to adapt and respond to changing circumstances has been instrumental in guiding the economy towards recovery.
Unemployment is a lagging indicator of up to 2 years. The Fed may well be tightening the economy when already the leading indicators are in recession.
They lying when rich people start saying a recession is t here they are panicking because without the poor and middle class not spending they don’t make anything.
My company just canceled everyone's bonus and merit increases for the year. People will likely be cutting back in the coming months. I'm calling BS here.
I work for a well recognized food brand. It’s a private company that is #1 in sales.
We are caught up and we have inventory in the warehouses.
So, just imagine other companies who may be struggling. They may not make it
Recession or not, I still see a more slower downtrend in the economy due to these rate hikes. People can’t afford to do leisure activities because of high rent/interest rates. You always hear someone loss their job. Maybe history is repeating itself. As long as the interest rates go up, things will get more expensive over time.
We’re in a recession. Fact is the yo-yo’s in charge will always change the meaning of what a recession is so they can say they’re not in one. Mark my words, as things get worse, they will continue to say that recession is possible but it will never happen under this administration. They’ll just change the definition so it doesn’t occur. They’ve already changed the goalpost once, they got away with it so will continue.
SOFT LANDING. I WAS RIGHT !!!!! LOL !!!!
Does anyone notice the man in the beginning whose shirt is ripped off near his collar?
They sound dumb
Never in history have the people had more ways to entertain themselves. Never in history have the people had more ways to legally intoxicate and inebriate themselves. Never in history have the people had more ways to gamble their money away. When I was a kid the only phone in my parents house was a rotary dial phone. Today every adult and most teens have a >$1000 phone in their pocket. My mind is blown by how good the economy is. And I've said that every day for the last 30 years.
Sales in the company I work for have been down for 5 months. They've been down 77% and the old timers that work there say there's never been a missed bonus in 15 years. I haven't been paid my bonus for 2 quarters.
Beef at my supermarket has gone up two dollars a pound in the last twelve months and they can’t admit that we’re already in a recession with more pain to come? Really?