According to Alan Blinder, there is a 50%-60% of Recession Next Year
However, Blinder reassured the Fed is more than prepared for such a situation...
The former Federal Reserve vice chair Alan Blinder has confirmed what many Americans are frantically worrying about: a recession in the United States economy. Nobody can even deny the fact that the economy is headed for shambles. What do you expect when you falsely build up a “bull run” with mass-produced pieces of paper with NO value?
Alan Blinder spoke to Becky Quick of CNBC during yesterday’s “Inflation and Your Stocks.”
“A recession is pretty likely. I don’t mean 89% probability, but maybe 50 to 60% probability. “
Blinder said as he gave a guestimate as to the chances of a recession occurring are in his humble opinion.
We all remember that the economy shrunk when shutdowns were the craze of the craziest land on the planet. Then, vaccines became widely available, Americans took their chances heading back to work, and then the economy began to recover. However, we miss a key point that this isn’t what led to a growth in our economy. It was most likely due to the fact that the Fed was printing off massive amounts of money to pump up the markets.
This pumping of the market and other economic situations such as increased inflation, supply struggles, and the uncertainty of now all of Europe during the Russia - Ukraine war has caused what has been labeled as an unavoidable recession. Many experts however say this will just be mild. In what context though? Mild compared to 2008 or mild compared to the 1970s?
“If we have very slow positive growth, it will feel like a recession to a lot of people.”
Slowed growth coupled with lower demand and a rise in unemployment is the cause of stagflation. The last time the United States had to combat this struggle was in the 1970s.
“When that hit [in the 70s] central banks didn’t know how to deal with it. I think there’s a much better understanding of it now.”
Blinder said, reassuring the Fed is more than prepared for such a situation to repeat.
Listen to the in-depth interview/talk HERE