Social menu is not set. You need to create menu and assign it to Social Menu on Menu Settings.


Mohamed Mohamoud

Author and the owner of idman news

June 29, 2022

Idman news

Wararka Jaraaidyada Soomaalida ay qoreen

Powell says he doesn’t think a recession is inevitable

Federal Reserve Chairman Jerome Powell said Thursday that he didn’t think a U.S. recession was inevitable.

“I don’t think that a recession is inevitable,” Powell said, during his second day of testimony to Congress on interest-rate policy.

“We can’t fail on this. We really have to get inflation down to 2%,” he added.

The Fed’s favorite inflation gauge, the personal consumption expenditure index,  ran at a 6.3% annual rate in April.

The Fed raised its benchmark interest rate by 75 basis points last week, the biggest move in almost 30 years, to a range of 1.5%-1.75%. At his press conference last week, Powell said either a 50 bp move or a 75 bp move seems likely at the next meeting on July 26-27.

Powell told lawmakers Thursday that the Fed has penciled in further rate hikes to a range of 3%-3.5% by the end of the year and then maybe 3.5%-4% in 2023.

Other Fed officials have spoken this week supporting a 75bp rate hike in July. The latest official was Fed Governor Michelle Bowman earlier Thursday.

Many economists think the Fed’s current policy path is reducing the odds of a soft landing for the economy and raising the probability of a recession.

The yield on the 10-year Treasury note

fell sharply for the second straight day on fears of a recession.

Fresh economic data on the U.S. manufacturing and services sectors added to worries about a recession.

Powell said Thursday the U.S. economy was very strong and stressed he has an “unconditional” commitment to fight inflation.

Asked about his level of commitment, Powell replied: “It’s unconditional…we have a labor market that’s sort of unsustainably hot and we are very far from our inflation target. We really need to restore price stability, get inflation back down to 2%.”

On Wednesday, Krishna Guha, a former Fed staffer now vice-chairman of Evercore ISI, noted that Powell did not use the word “unconditional” in his testimony to the Senate. Guha said this was a key factor in his view that Powell was “less hawkish than expected.”

Guha said that “unconditional” implies a readiness to accept higher unemployment, and a recession, in order to get inflation down.

Members of Congress expressed concern about a potential recession.

Rep. James Himes, a Democrat from Connecticut, said that in the wake of the Jan. 6 riot at the Capitol, he didn’t think “our democracy can sustain either runaway inflation or another recession. “

U.S. stocks


turned lower as Powell’s testimony lasted into the early afternoon.


How useful was this post?

Click on a star to rate it!

Average rating / 5. Vote count:

No votes so far! Be the first to rate this post.

Lasoco xaaladda EAST AFRICAN COUNTRIES ugu danbaysay ee Xanuunka CORONAVIRUS .