Alan Greenspan Sees Recession As Most Likely Outcome This Year

Former Federal Reserve Chair Alan Greenspan Americans A recession in the economy is the “most likely outcome,” as the central bank continues to tighten monetary policy to fight inflation.

Former New York Federal Reserve President William Dudley reinforced Greenspan’s According to some, a U.S. recession would be considered a claim “likely” The following information is available: Federal Reserve’s Rate hikes are a sure way to induce one.

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Chief Investment Officer For Wealth Investment Management Darrell Cronk reacted, WednesdayTo the former Federal Reserve FOX reports on officials’ grim predictions about 2023. Business’ “Making Money” Guest host Lauren Simonetti He agreed that a recession is the “likely outcome” To the U.S.’s fragile economy.

“I tend to agree more with Alan Greenspan that it’s {recession] probably the likely outcome,” Cronk Wednesday.

“And keep in mind, it’s not just interest rate hikes or cuts for that matter. It’s the combination of the money, supply is tightening, the stronger U.S. dollar has put pressure on financial conditions. Bank reserves are running off. So there’s a whole myriad of other elements that are also conspiring to tighten financial conditions simultaneously,” Cronk Detailed explanation “Making Money with Charles Payne.”

Alan Greenspan Is a former Federal Reserve The chairman of the U.S. central banking for almost two decades. (Reuters / Reuters Photos)

On He refuted the claim on the other hand. Dudley’s Argument that the Federal Reserve’s Rate increases are what’s causing a slump, but he clarified that the incremental raises are not solely responsible. While Cronk It should be noted that Fed’s Participation is “a great point,” He said that he would have had to take “a little bit” of the argument into account.

“I’m not sure that just simply cutting rates would do it [avoid a recession]. There’s the lag effect that we all know about with monetary policy. So typically 6 to 9 months, which means, if you use that as the lag effect, we’re just now feeling the June 75-basis point and maybe the July 75-basis point hikes,” Cronk explained.

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“We’ve yet to feel the 75 in September, the 75 in November and the 50 in December, and whatever else we do here in 2023. So that’s going to bite in the first half of 2023,” He concluded.

Cronk Arguments were made that consumers would experience a “reality” of the internet. “two-sided coin” in 2023 The first half of the year was particularly difficult, but the second half will likely see improvements. 

“I think you get a strong rally in the second half, but, be weary of the first half because there’s a lot of pain yet to feel,” He warned.

“I mean, you know, everybody wants inflation to come down to two, two and a half percent, including Chair Powell of the Federal Reserve. But there’s a lot of pain to go from 6.7 on the CPI, 6.7 down to 2.0 between here and there,” Cronk concluded. 

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