BY The Western JournalMay 19, 2022
2 years ago
BY 
 | May 19, 2022
2 years ago

Growing Number of US Economists Sound Recession Alarm Bells: 'Very, Very High Risk'

Economic storm clouds on the horizon could be the first sign of a looming, recession, according to many economic experts.

“Recession risks are high — uncomfortably high — and rising,” Mark Zandi, chief economist at Moody’s Analytics, told The Washington Post.

“For the economy to navigate through without suffering a downturn, we need some very deft policymaking from the Fed and a bit of luck."

Zandi said high gasoline and commodity prices from pandemic-related supply chain snarls and Russia's invasion of Ukraine war help make the odds of a recession in the next two years at around 50 percent.

A recession is defined as two consecutive quarters of negative contraction in the economy. The U.S. economy contracted in the first quarter of this year, the Post reported in late April.

“We’re traveling very close to the edge,” Zandi told the Post. “The housing market is the next thing that’s going to roll over; the question is just how hard.”

He is not alone.

Former Goldman Sachs chief executive Lloyd Blankfein this week said there is a “very, very high risk” of recession, while Wells Fargo CEO Charlie Scharf said there was “no question” the economy is facing troubles, whatever the label may be.

Former Federal Reserve chair Ben Bernanke said stagflation – a slow economy and high inflation that were a hallmark of the 1970s – could be near.

The Federal Reserve has raised interest rates .75 percentage points this year, and may do more to cool inflation. But that carries its own risks for the economy, as shown by a drop in new home construction and demand for mortgages. Both are very sensitive to interest rates, which have roughly doubled on 30-year mortgages over the past year.

"There is an extreme sense of nervousness out there,” Kevin Retcher, president of First Meridian Mortgage in Alexandria, Virginia, told the Post.

“It’s rare to have people win contracts and then back out, but that’s what’s been happening,” he said.

“Home builder sentiment fell to the lowest level in two years in May,” Yelena Maleyev, an economist for Grant Thornton, said in an analyst note, according to the Post. “Builders are seeing less foot traffic and expect sales to be softer as we enter the busy home-buying season.”

Although so far, consumers have been spending as if there was a need to make up for time lost during COVID-inspired lockdowns, inflation that is hitting 40-year highs may be taking its toll.

Big retailers have posted disappointing earnings, so much so that Walmart’s stock took an 11 percent hit on Tuesday, its worst free fall in 35 years, according to the Post. Target was next, with a 26 percent drop in its stock following a 52 percent drop in its quarterly profits, the Post reported. Target ascribed its woes to a slow consumer demand for big-ticket items.

“While we anticipated a post-stimulus slowdown in these categories … we didn’t anticipate the magnitude of that shift,” Brian Cornell, Target’s chief executive, said in a Wednesday earnings call, the Post reported. “When we talk to our guests, they often express their concerns about a host of rapidly changing conditions, ranging from geopolitics to the high and persistent inflation they’ve been experiencing.”

Some say the issue is how to adjust the economy without destroying it.

“Near term, the U.S. economy is holding up rather well despite the trouble abroad and the high prices at the checkout stand,” Beth Ann Bovino, chief U.S. economist for S&P Global, told the Post.

Bovino estimated a 35 percent risk of recession in the next year.

“People are spending, businesses are still trying to hire. But there are certainly challenges ahead," she told the Post. "The Fed’s actions will slow the economy, but the question is whether they could also topple the applecart.”

This article appeared originally on The Western Journal.

Written by: The Western Journal

NATIONAL NEWS

SEE ALL

Everyone Except Melania Wishes Trump Happy Birthday

According to a Daily Beast report, numerous public figures expressed their well-wishes for former President Donald Trump on his 78th birthday, while Melania Trump remained…
18 hours ago
 • By Staff Writers

Bill Maher Clashes With Charlamagne Tha God Over Racial Commentary

During a recent episode of "Real Time with Bill Maher," host Bill Maher and radio personality Charlamagne Tha God engaged in a fiery debate about…
18 hours ago
 • By Staff Writers

Man Admits to Killing Girl and Abduction, Requests Death Penalty

A Louisiana man, David Callihan, has admitted to abducting two children and killing one of them in a possible human trafficking case.  Callihan, 36, confessed…
18 hours ago
 • By Robert Cunningham

Murphy: SCOTUS Increasingly Political And Corrupt According To Senator

During a televised interview on CNN's "State of the Union," U.S. Senator Chris Murphy strongly criticized the U.S. Supreme Court, highlighting what he perceives as…
19 hours ago
 • By Staff Writers

CNN Sets Stage For First Presidential Debate Featuring Biden And Trump, RFK Jr. May Join

According to Fox News, CNN has established the guidelines for an upcoming debate in Atlanta on June 27. The event will feature President Joe Biden…
22 hours ago
 • By Staff Writers

DON'T WAIT.

We publish the objective news, period. If you want the facts, then sign up below and join our movement for objective news:

    LATEST NEWS

    Newsletter

    Get news from American Digest in your inbox.

      By submitting this form, you are consenting to receive marketing emails from: American Digest, 3000 S. Hulen Street, Ste 124 #1064, Fort Worth, TX, 76109, US, http://americandigest.com. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact.
      Christian News Alerts is a conservative Christian publication. Share our articles to help spread the word.
      © 2024 - CHRISTIAN NEWS ALERTS - ALL RIGHTS RESERVED
      magnifier