Risk of Recession, Continues to Rise, Amid Compounding Factors.
On April 28, the United States government
released data showing that the economy
shrank in the first quarter of 2022.
CNN reports that the latest data comes
amid an increasing number of frightening
headlines warning of an impending recession. .
Inflation has reached a 40-year high,
impacting people's ability to purchase
goods and sustain the economy. .
The Federal Reserve's approach
to fighting inflation by raising interest
rates also increases the risk of a recession.
The chairman of the Federal Reserve,
Jerome Powell, has argued that policymakers can
control inflation without triggering a recession.
The chairman of the Federal Reserve,
Jerome Powell, has argued that policymakers can
control inflation without triggering a recession.
CNN reports that the pandemic dramatically impacted supply chains, while Russia's invasion of Ukraine has driven up the cost of energy and food.
CNN reports that the pandemic dramatically impacted supply chains, while Russia's invasion of Ukraine has driven up the cost of energy and food.
Meanwhile, former Treasury Secretary
Larry Summers warned that
"stagflation" is also a possibility.
According to CNN, stagflation is
a combination of rising prices from
inflation and a stagnant economy. .
The Fed's current policy trajectory
is likely to lead to stagflation, with average
unemployment and inflation both averaging
over 5 percent over the next few years —
and ultimately to a major recession, Larry Summers, former Treasury Secretary,
via 'The Washington Post'.
According to CNN,
recessions usually don't last
as long as expansions.
The Congressional Research Service
found that average recessions between
WWII and now lasted about 11 months