Politico reports that “recession talk is rising” from Washington to Wall Street despite Biden’s assurances

Politico published an article on Monday warning that despite President Joe Biden’s efforts to reassure audiences and investors that a recession is not inevitable, “he is an increasingly lonely voice.”

“From Wall Street to Washington, the whisper of an impending economic downturn has risen to almost a roar as the Federal Reserve escalates its fight against the highest inflation in four decades,” wrote economic reporter Victoria Guida in “No More Whispers: Recession Talk Surges”[ads1]; in Washington.

Many in finance and the media have warned of a potential recession for several months, and Bloomberg published a piece in May claiming that The Federal Reserve was probably expecting a recession that time.

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President Biden talks about inflation and supply chain problems in the Port of Los Angeles on Friday 10. June 2022 in Los Angeles.
((AP Photo / Damian Dovarganes))

“Fed leader Jerome Powell has begun to say the quiet part out loud,” Guida wrote. “The central bank is willing to tolerate a recession if it means getting inflation under control.”

“While Biden has publicly supported Powell’s efforts, it reinforces expectations of a recession in the administration’s financial problems as Democrats enter congressional elections this year,” she continued.

President Biden has publicly stated that a recession is not inevitable. “There is nothing inevitable about a recession,” Biden said when asked by a reporter last month. “Do not invent things,” he told the reporter.

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WASHINGTON – JANUARY 22: The Federal Reserve building is seen January 22, 2008 in Washington, DC. (Photo by Chip Somodevilla / Getty Images)

Politico’s reporting, however, contradicts Biden’s rhetoric about inflation. “Across the nation, the leading topic of economic dialogue – high inflation – is rapidly turning into increasing certainty about an impending recession,” she wrote. “White House allies are preparing for that. Republican lawmakers are trumpeting that a downturn is inevitable.”

When it comes to finance and industry executives: “Wall Street analysts are increasingly building it into their forecasts. And business executives have quickly gone from subdued fears to talking openly about an economic downturn during investor discussions and in their companies.”

The guide noted that “warning questions arise: Does the US need a recession to curb inflation? How soon? And will the Fed continue to raise interest rates even if the country enters a downturn until inflation recedes?”

“Michael Feroli, chief economist at JPMorgan Chase, said a downturn may even begin as soon as this quarter, with recent data showing that spending – the biggest driver of GDP – is starting to decline,” she wrote.

PHOTO PHOTO: US President Joe Biden announces the nomination of Federal Reserve Chairman Jerome Powell for another four-year term, and Federal Reserve Board member Lael Brainard to serve as Deputy Chairman, in the Eisenhower Executive Office Buildings South Court Auditorium in the White House in Washington, USA, November 22, 2021. REUTERS / Kevin Lamarque / File Photo

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The guide noted that Feroli said: “Things look like we are losing altitude pretty quickly.”

“The government confirmed last week that the economy shrank in the first three months of the year – and Atlanta Fed’s economic growth tracking points to increased chances of a contraction in the second quarter,” she wrote.

Inflation and a declining economy can have a negative effect on Democrats Interim elections in 2022say savvy people.