Dismissing recession probability is a 'mistake,' former White House economist warns
Fed's favorite inflation gauge slightly improves in April, but Q1 GDP contracts
Reacting to the Federal Reserve's preferred inflation gauge improving by 0.3% from March to April, former Trump Council of Economic Advisers Chairman Kevin Hassett signaled it's a "mistake" to start dismissing the possibility of a recession on "Cavuto: Coast to Coast" Friday.
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KEVIN HASSETT: I hope it's a positive development, but I'm very skeptical that [PCE's] not going to accelerate from here. You know, there was a weird blip with gasoline prices going down in April and they've more than recovered that ground in May. And the thing that I look at really is that the consumer is really pessimistic… And one way you can see that is the savings rate has dipped to below 5%, which is the lowest it's been since the September of the Lehmann crash.
The bottom line is first quarter was negative. Second quarter right now, GDP has it at about 1%. If it comes in negative, then we're in a recession right now. And so I think dismissing that probability is a mistake.
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