St. Louis Fed President James Bullard (James Bullard) on Friday (20th) pointed out that unless there is a huge shock to the US economy, the US will not experience a recession this year or next.
The Fed decided to raise interest rates by one rate after the FOMC meeting in March and another two in May to reduce the worst inflation in 40 years. Federal Reserve Chairman Powell has also repeatedly said that the next two (June and July) decision-making meetings may each raise interest rates by 2 yards, and currently has not actively considered a 3-yard increase.
Bullard said in an interview on Friday that raising rates by 2 yards at the upcoming meeting was a good plan, stressing the need to raise rates to control inflation. Bullard also said the recent sell-off in U.S. stocks was not surprising, in part because of the reaction to rate hikes.
Due to the hawkish stance of the Federal Reserve and the aggressive monetary tightening policy, the forecast of economic recession is endless, and the US stock market crash has come in the past two weeks.Dow Jones It closed down more than 1100 points on the 18th, the worst day since June 2020, and the S&P fell into a bear market on Friday.
Bullard, however, played down the possibility of a recession or stagnant inflation.
Bullard pointed out: “The probability of a recession this year or next year is expected to be very low, and it will take a huge shock to move the United States into a recession. On the contrary, I predict that the US economy will be very good in the second half of this year. People want to go out after the epidemic restarts. Go ahead and that will lead to strong consumption this year.”
He forecasts that U.S. gross domestic product (GDP) will grow by 2.5% to 3%, and the unemployment rate may fall below 3% by the end of the year.