The head of the Fed allowed a recession in the US economy

There is a risk of a recession in the US economy, but such a scenario is less likely, said Jerome Powell, Chairman of the Board of Governors of the Federal Reserve System (FRS).

“A recession is not the most likely scenario for me, but it is definitely possible, and of course, many forecasters predict it,” he said. (quote according to RIA Novosti).

Current indicators show a “soft landing” for the US economy, Powell added.

On June 14, the Fed kept the base rate at the level of 5-5.25% per annum. The regulator noted the growth of economic activity at a “moderate pace”. Unemployment remains low, while inflation is still elevated. Inflation in the United States in June slowed to 4% in annual terms from 4.9% a month earlier, which was the lowest since May 2021.

A number of leading Wall Street analysts, including billionaire investor Jeremy Grantham and Morgan Stanley’s chief US equities strategist Mike Wilson, had previously warned of an impending recession and a potential fall in the stock market in the coming months, Vedomosti wrote. According to analysts at The Wall Street Journal, a recession in the US will come with a 44% chance.

Earlier this month, Goldman Sachs chief executive David Solomon told reporters that even with a modest increase in US GDP, it would look like a recession has already begun. US President Joe Biden, in turn declaredthat the country’s economy is “strong” and no recession is expected. US Treasury Secretary Janet Yellen had previously admitted a recession, but pointed to a decrease in the likelihood of such a scenario.