United States: a recession unlikely for the Secretary of the Treasury, very certain for the financial directors

A recession in the United States is unlikely but the risk exists, according to Janet Yellen, the American Secretary of the Treasury, who also ventured into the field of pop culture thanks to a question about the rapper Cardi B, the one- ci anticipating a recession. “There is a risk of recession,” Joe Biden’s economy and finance minister said Thursday at an event hosted by The New York Times, as fears mount over monetary policy measures needed to slow down inflation.

But to the question “is it likely?”, she replied “I don’t think so”. Many observers are worried about a recession, as the US central bank (Fed) tightens its monetary conditions vigorously in order to slow demand and therefore lower the inflation rate. However, “no element indicates that a recession is preparing”, estimated Janet Yellen, judging possible a “soft landing”, that is to say to slow inflation without plunging the economy into recession nor weigh too heavily on employment.

The Treasury Secretary was also asked about American rapper Cardi B, who wondered on Twitter on Sunday when the plunge of the economy into recession would be announced. “I don’t have much time for her, but I know her,” replied the minister.

CFOs convinced of a recession in early 2023

According to a survey by the American media CNBC, the majority (68%) of chief financial officers (CFOs) of companies believe that a recession will occur during the first half of 2023. And none think that the American economy will succeed in avoiding a recession. recession.

Inflation figures for May will be published on Friday and should still be very high, but could show that the slowdown started has continued. In April, the rise in prices had indeed decelerated but, at +8.3% over one year, had remained very close to its highest in 40 years, observed in March, with +8.5%.

To curb this inflation, the American central bank raises its rates, in order to slow down consumption and investment. It has already raised them twice, and they are now in a range of 0.75 to 1.00%. And it should proceed to a new turn of the screw, probably half a percentage point, Wednesday at the next meeting of its monetary committee.

>> Buy and sell your investments (stock market, cryptocurrency, gold, etc.) at the right time thanks to Momentum, Capital’s newsletter on technical analysis. And right now, with the promo code CAPITAL30J, take advantage of a free trial month.

Leave a Comment