Why the Fed won't be able to avoid a recession or bring inflation down to 2%

[cancel2 2022]

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Don't say you weren't warned!

The Fed may not be able to avoid a recession – and may not be able to bring inflation down to its 2% target either, according to BlackRock.

"The Fed will be surprised by the growth damage caused by its tightening," analysts said in a note on Tuesday.

The bank's analysts think a recession could come in early 2023, likely before inflation is down to 2%.

Markets are expecting the Fed to stick to aggressive rate hikes after Chairman Jerome Powell's speech at Jackson Hole last month.

But higher rates won't solve the biggest problem, namely low production capacity, analysts said, meaning low supply relative to demand. Without addressing supply, the Fed would have to lower demand by 2% via rate hikes to get inflation down quickly.

"The Fed will be surprised by the growth damage caused by its tightening, in our view," analysts said in a note on Tuesday. "When the Fed sees this pain, we think it will stop raising rates. It will be too late to avoid a contraction in economic activity by then, we think, but the decrease won't be deep enough to bring PCE inflation down to the Fed's target of 2%. Instead, we expect inflation to persist close to 3%."

https://markets.businessinsider.com...lation-target-economy-growth-blackrock-2022-9

 

[Theywillneverlearn!]

.
Don't say you weren't warned!

The Fed may not be able to avoid a recession – and may not be able to bring inflation down to its 2% target either, according to BlackRock.

"The Fed will be surprised by the growth damage caused by its tightening," analysts said in a note on Tuesday.

The bank's analysts think a recession could come in early 2023, likely before inflation is down to 2%.

Markets are expecting the Fed to stick to aggressive rate hikes after Chairman Jerome Powell's speech at Jackson Hole last month.

But higher rates won't solve the biggest problem, namely low production capacity, analysts said, meaning low supply relative to demand. Without addressing supply, the Fed would have to lower demand by 2% via rate hikes to get inflation down quickly.

"The Fed will be surprised by the growth damage caused by its tightening, in our view," analysts said in a note on Tuesday. "When the Fed sees this pain, we think it will stop raising rates. It will be too late to avoid a contraction in economic activity by then, we think, but the decrease won't be deep enough to bring PCE inflation down to the Fed's target of 2%. Instead, we expect inflation to persist close to 3%."

https://markets.businessinsider.com...lation-target-economy-growth-blackrock-2022-9

Liberals are "strangely" silent on this. Kind of no surprise though...when you are on welfare you never see the increase to actual working people.

 

[cancel2 2022]

Liberals are "strangely" silent on this. Kind of no surprise though...when you are on welfare you never see the increase to actual working people.

I think they all know that there is every likelihood that a monster recession is likely in 2023.

 

[Hawkeye10]

.
Don't say you weren't warned!

The Fed may not be able to avoid a recession – and may not be able to bring inflation down to its 2% target either, according to BlackRock.

"The Fed will be surprised by the growth damage caused by its tightening," analysts said in a note on Tuesday.

The bank's analysts think a recession could come in early 2023, likely before inflation is down to 2%.

Markets are expecting the Fed to stick to aggressive rate hikes after Chairman Jerome Powell's speech at Jackson Hole last month.

But higher rates won't solve the biggest problem, namely low production capacity, analysts said, meaning low supply relative to demand. Without addressing supply, the Fed would have to lower demand by 2% via rate hikes to get inflation down quickly.

"The Fed will be surprised by the growth damage caused by its tightening, in our view," analysts said in a note on Tuesday. "When the Fed sees this pain, we think it will stop raising rates. It will be too late to avoid a contraction in economic activity by then, we think, but the decrease won't be deep enough to bring PCE inflation down to the Fed's target of 2%. Instead, we expect inflation to persist close to 3%."

https://markets.businessinsider.com...lation-target-economy-growth-blackrock-2022-9

THATS MY LINE!

Ya, these idiots who claim that the economy is great/fine are in for a shock.

 

[Celticguy]

we're already in recession so the question is when we might wiggle out of it. That will take some time. Longer as Biden seems quite determined to write checks he hasnt the money for.

The Fed certainly CAN get inflation back down its just going to hurt and hurt worse because Biden wont stop spending money he doesnt have.

Blackrock wants to abamdon QT and return to QE simply because they dont want to contract now that they own a piece of everything. Its bad for business and they engineered their business to specifically take advantage of QE. Too bad for them.

We lost any hope of a soft landing when Joe was tossing around trillions like it was penny candy.

Free stuff isnt free and we all get to pay for it for the next few years.

With any luck Congress gets gridlocked for a coulpe years and Trump rolls into town to resume his boomer economy and make America great again.

 

[Lightbringer]

.
Don't say you weren't warned!

The Fed may not be able to avoid a recession – and may not be able to bring inflation down to its 2% target either, according to BlackRock.

"The Fed will be surprised by the growth damage caused by its tightening," analysts said in a note on Tuesday.

The bank's analysts think a recession could come in early 2023, likely before inflation is down to 2%.

Markets are expecting the Fed to stick to aggressive rate hikes after Chairman Jerome Powell's speech at Jackson Hole last month.

But higher rates won't solve the biggest problem, namely low production capacity, analysts said, meaning low supply relative to demand. Without addressing supply, the Fed would have to lower demand by 2% via rate hikes to get inflation down quickly.

"The Fed will be surprised by the growth damage caused by its tightening, in our view," analysts said in a note on Tuesday. "When the Fed sees this pain, we think it will stop raising rates. It will be too late to avoid a contraction in economic activity by then, we think, but the decrease won't be deep enough to bring PCE inflation down to the Fed's target of 2%. Instead, we expect inflation to persist close to 3%."

https://markets.businessinsider.com...lation-target-economy-growth-blackrock-2022-9

Why do you continue to insist on being retarded? Inflation as you know it is bullshit and you are an idiot.

 

[Lionfish]

Business Insider
Amazon is closing 2 facilities with a total of 300 employees and reportedly scrapping plans for 42 new buildings

 

[evince]

https://en.m.wikipedia.org/wiki/BlackRock


This is who black rock is


Why are you trusting a corporation that is so closely tied to China?



They have reason to lie to you idiots

 

[Concart]

we're already in recession so the question is when we might wiggle out of it. That will take some time. Longer as Biden seems quite determined to write checks he hasnt the money for.

The Fed certainly CAN get inflation back down its just going to hurt and hurt worse because Biden wont stop spending money he doesnt have.

Blackrock wants to abamdon QT and return to QE simply because they dont want to contract now that they own a piece of everything. Its bad for business and they engineered their business to specifically take advantage of QE. Too bad for them.

We lost any hope of a soft landing when Joe was tossing around trillions like it was penny candy.

Free stuff isnt free and we all get to pay for it for the next few years.

With any luck Congress gets gridlocked for a coulpe years and Trump rolls into town to resume his boomer economy and make America great again.

Trump added 8.2 Trillion dollars to the national debt.

 

[Yakuda]

Why do you continue to insist on being retarded? Inflation as you know it is bullshit and you are an idiot.

It this part of a, inflation is a good thing, speech?

 

[evince]

https://en.m.wikipedia.org/wiki/Reaganomics#Debt_and_government_expenditures



Their all time hero Reagan tripled the debt


During Reagan's presidency, the federal debt held by the public nearly tripled in nominal terms, from $738 billion to $2.1 trillion.

 

[evince]

The Republican party always does TAX CUTS for the wealthy and claim it will trickle down and boost the economy so much it will end debt



It NEVER FUCKING DOES

but idiots always keep believing that fucking lie

 

[cawacko]

we're already in recession so the question is when we might wiggle out of it. That will take some time. Longer as Biden seems quite determined to write checks he hasnt the money for.

The Fed certainly CAN get inflation back down its just going to hurt and hurt worse because Biden wont stop spending money he doesnt have.

Blackrock wants to abamdon QT and return to QE simply because they dont want to contract now that they own a piece of everything. Its bad for business and they engineered their business to specifically take advantage of QE. Too bad for them.

We lost any hope of a soft landing when Joe was tossing around trillions like it was penny candy.

Free stuff isnt free and we all get to pay for it for the next few years.

With any luck Congress gets gridlocked for a coulpe years and Trump rolls into town to resume his boomer economy and make America great again.

We had a $1 trillion deficit under Trump in 2019 (during a growing economy and pre COVID). I actually don't think anyone we elect President will do anything about spending but we've been there and done that with Trump and he certainly showed he had no problem massively increasing federal spending.

 

[Celticguy]

We had a $1 trillion deficit under Trump in 2019 (during a growing economy and pre COVID). I actually don't think anyone we elect President will do anything about spending but we've been there and done that with Trump and he certainly showed he had no problem massively increasing federal spending.

he was a little like Reagan in that he was too eager to play ball with the dems so long as he got what he wanted.

 

[Concart]

he was a little like Reagan in that he was too eager to play ball with the dems so long as he got what he wanted.

Do you have an example of that? What budget passed with Democratic support? Certainly not the tax cuts that ballooned the deficit.

 

[cawacko]

he was a little like Reagan in that he was too eager to play ball with the dems so long as he got what he wanted.

Republicans never controlled the House during Reagan's 8 years. Republicans controlled the House and Senate during Trump's first two years. He didn't try to cut spending at all really. On one hand I get it, you don't elected taking things away from people. But at the same time he spent just as much, if not more, than any career politician. So to me, complaining about spending and saying we need Trump back to deal with it are contradictory statements.

 

[evince]

Do you have an example of that? What budget passed with Democratic support? Certainly not the tax cuts that ballooned the deficit.

Clinton PROVED what lowers deficits


Not one fucking Republican voted for the 1993 budget reduction act that actually worked


Then they spent YEARS lying and saying it didnt work

Then tried to claim the results

 

[evince]

https://en.m.wikipedia.org/wiki/Omnibus_Budget_Reconciliation_Act_of_1993



The Omnibus Budget Reconciliation Act of 1993 (or OBRA-93) was a federal law that was enacted by the 103rd United States Congress and signed into law by President Bill Clinton. It has also been unofficially referred to as the Deficit Reduction Act of 1993. Part XIII of the law is also called the Revenue Reconciliation Act of 1993.

 

[evince]

Combined with a strong economy, the 1993 deficit reduction plan produced smaller budget deficits each year. In 1998, the federal government experienced the first budget surplus since 1969. Reflecting the perceived importance of the budget surplus, the New York Times described the end of budget deficits as "the fiscal equivalent of the fall of the Berlin Wall."[15]

 

[evince]

https://en.m.wikipedia.org/wiki/Omnibus_Budget_Reconciliation_Act_of_1993



The Omnibus Budget Reconciliation Act of 1993 (or OBRA-93) was a federal law that was enacted by the 103rd United States Congress and signed into law by President Bill Clinton. It has also been unofficially referred to as the Deficit Reduction Act of 1993. Part XIII of the law is also called the Revenue Reconciliation Act of 1993.

Legislative history
Edit
Clinton inherited major budget deficits left over from the Reagan and Bush administrations; fiscal year 1992 had seen a $290 billion deficit. In order to cut the deficit, Bentsen, Panetta, and Rubin urged Clinton to pursue both tax increases and spending cuts. They argued that by taming the deficit, Clinton would encourage Federal Reserve Chairman Alan Greenspan to lower interest rates, which, along with increased confidence among investors, would lead to an economic boom.[6] Some of Clinton's advisers also believed that a focus on cutting the deficit would be politically beneficial since it would potentially help Democrats shed their supposed "tax and spend" reputation.[7] Though Secretary of Labor Robert Reich argued that stagnant earnings represented a bigger economic issue than the deficits, Clinton decided to pursue deficit reduction as the major economic priority of his first year in office.[8] In doing so, he reluctantly abandoned a middle class tax cut that he had championed during the campaign.[9]

Clinton presented his budget plan to Congress in February 1993, proposing a mix of tax increases and spending reductions that would cut the deficit in half by 1997.[10] Republican leaders strongly opposed any tax increase and pressured congressional Republicans to unite in opposition to Clinton's budget,[11] and not a single Republican would vote in favor of Clinton's proposed bill.[8] Senate Democrats eliminated the implementation of a new energy tax in favor of an increase in the gasoline tax, but Clinton successfully resisted efforts to defeat his proposed expansion of the earned income tax credit.[12]

Ultimately every Republican in Congress voted against the bill, as did a number of Democrats. Vice President Al Gore broke a tie in the Senate on both the Senate bill and the conference report. The House bill passed 219-213 on Thursday, May 27, 1993.[1] The House passed the conference report on Thursday, August 5, 1993, by a vote of 218 to 216 (217 Democrats and 1 independent (Bernie Sanders (I-VT)) voting in favor; 41 Democrats and 175 Republicans voting against).[2] The Senate passed the conference report on the last day before their month's vacation, on Friday, August 6, 1993, by a vote of 51 to 50 (50 Democrats plus Vice President Gore voting in favor, 6 Democrats (Frank Lautenberg (D-NJ), Richard Bryan (D-NV), Sam Nunn (D-GA), Bennett Johnston Jr. (D-LA), David L. Boren (D-OK), and Richard Shelby (D-AL) now (R-AL)) and 44 Republicans voting against). President Clinton signed the bill on August 10, 1993.

The government was able to raise additional revenue, which helped to balance the budget and, by the end of the 1990s, began to reduce privately-held public debt.