Greenspan: US ‘most likely’ to fall into recession after continued Fed interest rate hikes | Anue tycoon – US Stock Exchange

Former US Federal Reserve Chairman Alan Greenspan said on Tuesday (3) that a US recession was “most likely” after the Federal Open Market Committee (FOMC) aggressively raised interest rates in 2022. “appears accordingly.

Greenspan, now a senior economic advisor at Advisors Capital Management, wrote in a TuesdayYear-end questions and answers“A US recession would be the ‘most likely’ outcome after the Federal Reserve begins a series of rate hikes…Despite the deceleration in consumer prices in the last two monthly surveys, I” Don’t think so that “this is reason enough for the Fed to pivot to avoid a mild recession.”

Greenspan believes that wage growth and employment still need to weaken further so that the decline in inflation is not temporary and the US has the opportunity to enjoy a short period of calm inflation, but believes that the quiet period be short enough and too late at night.

He also warned that if the Fed cuts interest rates too fast, the most obvious risk is that inflation will explode again, and everything will return to its original point, and it will damage the Fed’s credibility as a guarantor of stable prices, so It does not expect the Fed to move prematurely into accommodative policy unless financial markets fail.

The US will fall into an economic recession this year appears to have become a market consensus. Former Federal Reserve Bank of New York chairman William Dudley believes in an interview on Tuesday that a US economic recession is possible, but there may not be a serious slowdown.

Dudley said: “Usually a recession is probably just because the Fed has to do something, but I’m going to be a Fed-induced recession, and the Fed can do away with easy money. I think financial instability There is little risk of a catastrophe that pushes the economy into a deep recession”.

Two recently released research reports from the Federal Reserve also hinted that a recession is coming. The Federal Reserve Bank of St. Louis released a report on Dec. 30 and said more than half of the 50 US states showed signs of economic slowdown It is usually a key threshold for predicting the impending recession. At the same time, the Federal Reserve Bank of San Francisco also released a report stating that changes in the unemployment rate may also indicate an increase in the recession risks.

And not only the US recession is coming, International Monetary Fund (IMF) President Kristalina Georgieva (Kristalina Georgieva) has warned that a third of the world is expected to go into recession this year, of which the US, EU and China all expect an economic slowdown, 2023 2022 will be a “tougher” year than 2022.