“We’re not going to be in a recession,” he said in July. “We’ll see some coming down. But I don’t think we’re going to -- God willing, I don’t think we’re going to see a recession.”
The state of the economy is a potential liability for Democrats heading into the November midterm elections, in which Biden and his party are campaigning to hold on to slim majorities in both chambers of Congress. Warnings abound that the US economy is poised for a slowdown or contraction -- JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said this week that headwinds are “likely to put the US in some kind of recession six-to-nine months from now.”
The Fed isn’t officially forecasting a recession but its officials do expect unemployment to rise over the next year and Chair Jerome Powell has warned that there may be economic pain coming from the central bank’s steep rate hikes.
The Fed is poised to deliver its fourth-straight 75-basis-point hike when it meets early next month, just days before the midterms.
“At this point, the larger risks come from tightening too little and allowing very high inflation to persist and become embedded in the economy,” Federal Reserve Bank of Cleveland President Loretta Mester said Tuesday during an event with The Economic Club of New York.
The Department of Labor will release the latest inflation numbers Thursday, the last release before Election Day. The median estimate of economists surveyed by Bloomberg is for a 8.1% annual rate - the lowest since February.
A Monmouth poll conducted in late September showed 82% of Americans called inflation an extremely or very important issue and 30% approve of Biden’s handling of the issue. On jobs and unemployment, 68% said the issue was extremely or very important, with 43% approving of the president.
-With assistance from Jonnelle Marte, Nancy Cook and Eric Martin.
This article was provided by Bloomberg News.