Biden Admin Lies: The Fed Actually Called The Economy 'Strong'

By Jacob Taylor | Wednesday, 29 June 2022 10:45 PM
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Biden Admin Lies: The Fed Actually Called The Economy 'Strong'

New York Federal Reserve President John Williams said that he doesn’t see a recession in the near future, even as other economists and investors worry that a downturn will result from the central bank's interest rate hikes.

Williams said Tuesday that he isn’t working under the belief that the economy will fall into a recession, but he admitted America's economic growth will eventually take a hit by the Fed’s historic tightening.

“A recession is not my base case right now,” Williams told CNBC. “I think the economy is strong. Clearly, financial conditions have tightened, and I’m expecting growth to slow this year quite a bit relative to what we had last year.”

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A recession is described by the National Bureau of Economic Research, a private academic group, as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.” Most view two consecutive quarters of negative gross domestic product growth as indicative of a recession.

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Despite Williams’s take on the economy's future, several prominent figures in the finance and economic world are now saying a recession is more likely than not, given the increased magnitude of rate hikes.

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Williams suggested Tuesday that U.S. gross domestic product growth would slow to 1% to 1.5% by the end of the year — a substantial downward revision from previous forecasts, which have repeatedly moved lower over the past several months as inflation remains stickier than expected.

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“But that’s not a recession,” he said. “It’s a slowdown that we need to see in the economy to really reduce the inflationary pressures that we have and bring inflation down.”

Still, on the same day that Williams foresaw the United States would avoid a recession, Ark Invest CEO Cathie Wood said that economic stagnation is already in full swing, adding another voice to the chorus of those who believe a recession is inevitable.

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“We think we are in a recession,” she said on CNBC. “We think a big problem out there is inventories ... the increase of which I’ve never seen this large in my career. I’ve been around for 45 years.”

Wood stressed the country’s severe inflation and the war in Ukraine's disruptions to supply chains, which have exacerbated the situation. Inflation ticked up to a scorching 8.6% in the 12 months ending in May, according to the consumer price index — the highest level since 1981.

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“We were wrong on one thing and that was inflation being as sustained as it has been,” Wood said. “Supply chain ... can’t believe it’s taking more than two years and Russia’s invasion of Ukraine, of course, we couldn’t have seen that. Inflation has been a bigger problem, but it has set us up for deflation.”

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