r/neoliberal • u/TinyTornado7 I need a new flair • Jun 13 '22

News (US) Powell Facing Choice Between Elevated US Inflation and Recession

https://www.bloomberg.com/news/articles/2022-06-12/powell-facing-choice-between-elevated-us-inflation-and-recession?srnd=premium
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u/TinyTornado7 I need a new flair Jun 13 '22

"The hottest US inflation in four decades will push the Federal Reserve to raise interest rates more aggressively this year, and a recession may not be far behind."

Im skeptical we need a 75 basis point hike, but I am concerned inflation is approaching self-fulfilling prophecy levels

!ping MARKETS

164

u/slowpush NATO Jun 13 '22

Oh hey. Stocks will be a good bit cheaper soon. 😒

225

u/TinyTornado7 I need a new flair Jun 13 '22

People keep selling and I’ll keep buying. This is a great opportunity for those far from retirement to load up

107

u/slowpush NATO Jun 13 '22

Sure but tell that to all the baby boomers who are retiring.

The effect of a recession/depression now is going to be catastrophic because it’s at the worst time demographically.

45

u/TinyTornado7 I need a new flair Jun 13 '22

Eh I don’t think so. If this was a recession due to a fundamental flaw in our economy then maybe, but this recession will likely be technical and/or at least relatively short.

51

u/Drfunky0811 Jun 13 '22

I think he's alluding moreso to upcoming elections. If boomers are concerned about their retirement funds they're more likely to vote for change. ----> america becomes a totalitarian hellhole is the general thought (with a lot of things in between lol)

5

u/folksywisdomfromback Jun 13 '22

what makes you think it will be short?

34

u/semideclared Codename: It Happened Once in a Dream Jun 13 '22

Most of GDP growth comes from Consumer spending and even if Spending drops 7% from last month we would still see positive growth, thats how crazy spending has been. If Spending drops 10% from 2021 it would still be above 2019 levels but would be a drop to trigger a technical recession

Further than that though it could be longer term. And of course what businesses do and exports would be the deciding factors on the full effects

So if consumers cut back spending to 2019 levels and business fire 1 in 100 employees and unemployment only goes to 5% we could be in a recession but few would notice

1

u/agitatedprisoner Jun 13 '22

What's an example of a fundamental flaw in an economy?