"Hurricane" as well as recession - Viral News Magazine

“Hurricane” as well as recession

“The hurricane is on our way,” JPMorgan Chase CEO Jamie Dimon said at a financial conference in New York.

Larry Summers, a former Treasury Secretary and White House economic adviser under two Democratic presidents, told CNN “unfortunate and painful facts.” 2 years.

For now, Americans will need to get used to higher prices, according to President Joe Biden. “The idea of being able to click a switch to reduce the cost of gasoline is unlikely in the short term, nor is it with food,” he said. Biden said at the White House on wednesday.

Both Dimon and Summers I said their prophecy.

“I don’t know if it’s a minor or a superstorm sundi,” Dimon said in an extended hurricane analogy. But he added, “You should support yourself.”

Mr Summers said he suspected that there might be something in the near future of a pandemic or depression order.Still, as CNN wrote at the beginning of May, most CEOs are preparing. Because of the recession..

Economists, like everyone else, are often wrong. Summers and Dimon were among those who warned last year that Federal Reserve and Treasury leaders were wrong about inflation.

Officials said inflation, which is currently at its highest level in 40 years, will be temporary.

‘I was wrong’

That temporary inflation forecast wasn’t true, and Treasury Secretary Janet Yellen now easily admits it.

On Tuesday, when CNN’s Wolf Blitzer played a clip a year ago for Yellen, she owned it, saying she didn’t expect inflation to be a problem.

“Well, I think I was wrong about the path of inflation,” she said.

Why was she wrong?

“I didn’t fully understand the unexpected big shock to the economy that pushed up energy and food prices and the supply bottlenecks that had a negative impact on the economy that I didn’t understand at the time,” Yellen said. I pointed out.

See a full interview with Yellen.

The war in Ukraine affected fuel and food prices.

Covid-19 variants continue to affect workers, A roaring supply chain.

Who knows what unexpected things will happen next?

I’m taking it seriously now

Inflation is now White House Top PriorityBiden said Tuesday prior to the meeting between Federal Reserve Chairman Jerome Powell and Yellen.

Gasoline prices set a new record of $ 4.67 a gallon upon Wednesday confused some experts who thought prices might ever go down.

The beginning of the summer travel season and Europe’s departure from Russian oil are just two of the many reasons they can continue to rise. CNN’s Chris Isidore..

More rate hikes will be needed

Summers argued Wednesday that it was almost guaranteed that the Federal Reserve would have to raise interest rates far more than it had to curb inflation. He said the Fed may have to continue raising rates even if it feels inflation is restrained.

“There is always the temptation to stop antibiotics as soon as you feel better.” Summers saidIt often “relapses the problem later”.

bright side

Inflation feels sick and you just go to a grocery store or eat, but it’s still far from the 1970s.

“Yes, inflation is painful.” I’m writing Paul R. Ramonica on CNN.. “But the employment market is still in good shape. Unemployment is still low and wages are still rising, but certainly not as fast as prices. Supply chain constraints are finally beginning to ease and pressure on prices. Will be significantly relaxed. “

Job increase will be slower

Yellen told Blitzer that the increase in work was slowing down and the goal now is to maintain them.

Biden too Warning in The Wall Street Journal editorial Published on Monday Employment growth will slow, but “it will be a sign that we are well on the way to the next stage of recovery,” but don’t worry.

Don’t get in the way of the Fed

Before the meeting between Powell and Yellen, Biden’s main answer to the fight against inflation was to stay out of the way of the Fed and “respect the Fed’s independence.”

In contrast, former President Donald Trump has regularly pressured the Fed to keep interest rates low.

Rate hikes are mostly what the Fed can do, but at the same time Balance sheet reduction“Quantitative tightening.. “Doing both at the same time is a real-time experiment.

Summers proposed to revoke the corporate tax cuts enacted by Trump and the Republicans in 2017, which would require more time and more votes than the Democrats currently have in the Senate.

According to him, the main thing is to face inflation now and avoid bigger problems in the future.

According to Summers, the rule of thumb is that concern. Interest rates can stop inflation when it exceeds inflation.

In other words, borrowing money in the next few years can be much more expensive.

“I think that’s something we have to keep in mind, which was necessary in the past to curb inflation,” he said.

Summers warned that he might be wrong, but he’s ready.

Source: www.cnn.com