Recession

The risk of a recession in the U.S. is growing rapidly, according to Morgan Stanley economists, as stubbornly high inflation threatens to weigh on economic activity.

CEO and corporate recovery expert responsible for turning around General Motors in 2009 blames the Biden administration’s ‘bureaucratic bungling’ and a host of corporate and government ‘screw ups’ for exacerbating the infant formula crisis.

With the Federal Reserve moving rapidly to tame sky-high inflation by aggressively raising the benchmark federal funds rate, Charlie Scharf said that it is likely there will be some economic fallout.

Fed Chairman Jerome Powell and his colleagues initially operated under the assumption that higher inflation was narrowly related to the COVID-19 pandemic, and that once virus cases started to decline, prices would stabilize too.

The index has already plunged in recent weeks as concerns over sky-high inflation, rising interest rates and a darkening economic outlook continue to weigh on the market.

Former Goldman Sachs CEO Lloyd Blankfein said on Sunday that he believes the economy is at risk of possibly going into a recession, as the U.S. Federal Reserve continues to raise interest rates to tackle rising inflation.

DoubleLine CEO Jeffrey Gundlach, known as 'The Bond King,' warned that in 2023 "we may see a real recession.”

The note comes just one day after the Labor Department reported inflation surged higher than expected in April, with prices rising 8.3%, close to a 40-year high.

The Labor Department is releasing the highly anticipated consumer price index on Tuesday morning, providing a fresh look at just how hot inflation ran in April.

Small businesses confidence hovered near a two-year low in April, with the most owners since 1981 reporting that sky-high inflation was their single most important problem, a survey showed on Tuesday.

With inflation at the highest level in 40 years and the Federal Reserve taking increasingly aggressive action to cool consumer demand and prices, the risk of a global recession is on the rise, according to Morgan Stanley economists.

Two former Federal Reserve officials are warning the U.S. central bank will struggle to tame the hottest inflation in four decades without sending the economy into a recession.

The April jobs report revealed another month of robust hiring, likely solidifying the case for the Federal Reserve to pivot toward a mega-sized interest rate hike as it seeks to cool red-hot inflation.

The Federal Reserve ramped up its inflation fight on Wednesday with the biggest interest rate increase in two decades and signaled that additional aggressive moves are likely in coming months.

Former Atlanta Federal Reserve President and CEO Dennis Lockhart argued that the central bank “took a lot of policy uncertainty out of the picture” on Wednesday.

The number of Americans filing for unemployment benefits unexpectedly rose last week, hitting the highest level since February as soaring inflation and a persistent labor shortage weigh on businesses.

Federal Reserve Chairman Jerome Powell alleviated some concerns of a looming economic recession after he rejected the possibility of an even larger interest rate hike than the one announced by the U.S. central bank on Wednesday.

The Federal Reserve said Wednesday it would raise interest rates by a half point for the first time in two decades as policymakers ramp up their fight to cool red-hot inflation, a move that threatens to slow U.S. economic growth and exacerbate financial pressure on Americans.

Fed Chairman Jerome Powell has pivoted sharply on inflation, transforming into a policy hawk in the months since he conceded that rising prices had proven to be more powerful and persistent than initially expected.

Goldman Sachs strategists led by Jan Hatzius said the probability of an economic downturn within the next 24 months is 38%.