White House economic adviser Brian Deez stopped short of ruling out a US recession as the Federal Reserve combats inflation, saying the central bank needs space to do its job.
National Economic Council director R Deez said the outlook reflects President Joe Biden’s pledge to make the biggest consumer price hike in four decades his “top priority.”
“We need to give the Fed the space and freedom to do its job, which is to keep inflation under control,” Mr. Deez said on CNN. state of the Union Yesterday
“There are always risks,” he said when asked if the US was headed for a recession.
Consumers are experiencing the highest inflation in decades brought on by expanded fiscal and monetary policy combined with rising food and energy costs as a result of supply constraints and Russia’s invasion of Ukraine.
A price measure linked to consumption closely tracked by the Fed rose 6.6 pc for the 12 months ending March, while another measure, the consumer price index, rose 8.3 pc for the year ending April – the highest in decades. between readings.
US central bankers say bringing prices back to their 2pc inflation target is their top priority.
He raised the benchmark lending rate by half a percentage point earlier this month after a quarter-point increase in March, and chairman Jerome Powell said the policy committee plans to raise it in half-point phases over the next few meetings.
Mr Powell also said there was a “good chance” that the Fed could slash inflation toward its 2pc target without a “severe” recession or “materially high” unemployment.
Americans are increasingly pessimistic about the US economy, the stock market and inflation, according to a CBS News poll published yesterday, which found that the share of people calling the economy bad this month increased from 46 pc and 64 pc in April 2021 69 pc. last November.
Mr Dees said the US economy is in transition to more “stable and resilient growth”.
“While there are absolutely risks with inflation first and foremost, this is most important: the United States is better positioned than any other major economy to bring inflation down and address these challenges without forfeiting all economic gains.” And it’s because of the strength of our recovery,” Mr. Deez said Fox News Sunday,