The US White House continues to surprise, not on a rational economic or energy policy but one that continually surprises with denial, ignorance and perhaps straight-out delusion. Anyone living in 2022 is well aware of the burden of soaring inflation and the stresses of protests, lockdowns and wars around the world. Last week it was reported that American consumer’s sentiment is at the lowest ever. On Tuesday Heather Boushey, a member of President Joe Biden’s Council of Economic Advisers spoke of the Biden economic strategy. They are relying on ‘wiggle room’ to stop economy from recession. Confident yet?
Reuters reporting on an event hosted by the Washington Post.
When asked about Joe Biden’s recent comment that a recession was not inevitable, Boushey said she agreed, adding strong family balance sheets, the low unemployment rate and the economy’s ability to weather the COVID-19 pandemic and other “storms,” without elaborating on specific data.
“That gives us some confidence that should oil prices continue to be high or maybe go up, which would be horrible, … there’s enough of wiggle room that businesses and families will be able to make it through because they have resources to fall back on,” she said.
“It’s part of the job description to worry about when the next recession will happen,” Boushey said. “But … right now we remain optimistic that we will not have to see something that will lead to the kinds of scarring of American families that we really don’t want to see.”
US Treasury Secretary Yellen followed up on Boushey’s remarks:
Headlines via Reuters
- Believes there is a path to bringing down inflation while maintaining a strong labor market
- Traditional recession measure of two consecutive quarters of negative growth ‘has typically worked’ but recessions aren’t all alike
- Most economists do not believe the US will enter recession because they are taking into account unique post-pandemic economic features
- An increase in low labor force participation could take some pressure off inflation
It is very clear that the US Administration and Central Bank got it all wrong, the question is how competent ate they as economic stewards? Here is just a snippet of the last week or so headlines:
- US Existing Home Sales Fall for Fourth Straight Month in May as Mortgage Rates Rise
- Federal Reserve Monetary Policy Report Outlines Risks to Inflation, Liquidity and Employment
- US Industrial Production in May Slows with Manufacturing Falling
- US Housing Starts Fell 8.9% as Building Permits Fell 7.0% in May
- Mortgage Rates Soar to Highest Level Since 2008 at 5.78%
- Federal Reserve Largest Raises Rates Most Since 1994, Up75 Basis Points as Expected
- Household Financial Stress Highest Since Outset of Pandemic US Economic Optimism Index Shows
- US Producer Price Inflation Continues Elevated in May PPI +0.8% m/m +10.8% y/y
- U.S. Small Business Expecting Better Business Conditions Hits Record Low
- US Consumer Sentiment Crashes to Record Low on Rampant Inflation
- U.S. Inflation Rocks To 4O Year High as Food and Energy Prices Soar
- American Household Wealth Falls $1.49.3 Trillion Losing $3.0 trillion in Stocks in Q1 2022
A tough week or so, not a lot of wiggle room one would think.
Source: Reuters, TC
From The Traders Community Research Desk