Powell "Not Forecasting a Recession"

-edited

In a speech today in Zurich Switzerland, Jerome Powell stated the Fed is not forecasting a recession.

YouTube Video of Zurich Conference

The Fed has never forecast a recession, even after they have started.

It reminds me of Bernanke's denials on the housing bubble.

No Comment on Trade?

Everything's Fine

https://twitter.com/realDonaldTrump/status/1169983251160731651

Accurate Reader Comment

"Not only has the Fed never forecast a recession they've never forecast a crash or bubble. But that hasn't stopped them from telling us we don't have a bubble or crash on the horizon."

Mike "Mish" Shedlock

Comments (34)
No. 1-11
Casual_Observer
Casual_Observer

It will be slow growth ~1%. But if inflation is running closer to 2% what does it mean ? It may not feel like a recession but the treadmill will make sure most people get nowhere.

Sechel
Sechel

Powell has a tough job. Fed is supposed to maintain full employment but Trump is engaged in reckless trade policies hurting growth. He can't be seen as political and enabling bad policies but he still has to react to slowing growth when and if it happens.

Sechel
Sechel

Not only has the Fed never forecast a recession they've never forecast a crash or bubble. But that hasn't stopped them from telling us we don't have a bubble or crash on the horizon

Tony Bennett
Tony Bennett

The Federal Reserve's track record speaks for itself

Ben Bernanke:

"Overall economic growth was quite slow but apparently positive in both the fourth quarter of 2007 and the first quarter of this year. Activity during the current quarter is also likely to be relatively weak. We may see somewhat better economic conditions during the second half of 2008, reflecting the effects of monetary and fiscal stimulus, reduced drag from residential construction, further progress in the repair of financial and credit markets, and still solid demand from abroad. This baseline forecast is consistent with our recently released projections, which also see growth picking up further in 2009."

From a speech given on ... June 3rd, 2008 ... otherwise known as 7 months deep into last recession.

Tony Bennett
Tony Bennett

Sticking with my "light switch" prediction*

*Economic activity more or less stable ... then falls off the cliff

shamrock
shamrock

"The Fed has never forecast a recession, " And they are almost always right. Way higher accuracy than those who predict recessions.

Six000mileyear
Six000mileyear

They can't even predict where interest rates are headed. Over 95% of the time FED adjusts interest rates AFTER the bond market has made a move. Nobody can simultaneously lead and follow, unless he's chasing his tail.

bradw2k
bradw2k

Debt is sucking the life out of the economy, because the lower yields go the less incentive there is to increase productivity rather than to just borrow more and more. I don't think Powell understands this, I think he just sees debt as a problem of having larger interest payments to make. Any sane economist should be freaking out that low-risk yields are dropping to zero, and that money is pouring into sovereign debt (which is NOT productive investment, it is a destructive claim on tax slavery), and what this all means. But central bankers embrace dropping rates, and say with a straight face that we are having moderate growth and a positive outlook.

Country Bob
Country Bob
  1. If there is a recession coming, the Fed has proven beyond any reasonable doubt and beyond any shadow of a doubt that they will not see it coming.

That is why Powell isn't forecasting a recession or anything else. The Fed has embarrassed itself enough already.

  1. There is too much debt in the system. Free cashflow is being diverted to interest payments for debts already incurred, it is not being spent on research or development much less new products.

Debt is a BIG problem. Unless debt levels come down, growth will continue to be anemic no matter what the Fed does or does not do. Fiscal stimulus is counterproductive, because it creates more debt. And diverting money from the private sector to the public sector via onerous taxes will only slow growth further.

The era of big government is over. From now on, big government will only serve to decimate its own tax base. Period. End of discussion.

Realist
Realist

There will be a recession in the US at some point. I just don’t expect it during Trump’s first term. Perhaps, if he is re-elected it might happen in his second term. It depends on whether he keeps pushing his trade wars. If he continues to escalate them, then a recession is possible. Until then, I expect growth to slow a bit to between 1 and 2%.

MadDenker
MadDenker

The Fed has never had a problem being blamed for recessions before. What has changed?