The administration of U.S. President Joe Biden expects the country’s economy to be strong enough to face various threats from the war in Ukraine that are increasing price pressures and rising interest rates that are slowing growth.
Still, there are concerns about the impending economic downturn among some Wall Street analysts.
The next few months will prove whether President Joe Biden’s efforts for recovery with last year’s $ 1.9 trillion aid package will last long, or the economy will deteriorate due to excessive government aid.
The director of the White House National Economic Council, told that the 3.6% unemployment rate and strong growth last year have put America in a safer place than any other country in the world.
However, others saw the economy as struggling to sustain growth while easing inflation which is currently at a 40 -year high of 7.9%.
The Federal Reserve (Fed) has signaled to raise interest rates more aggressively to tackle inflation this year, but the Ukraine-Russia war has threatened the stability of global energy and food markets by increasing price pressures.
Deutsche Bank on Tuesday became the first major financial institution to predict a U.S. recession. While former treasury secretary Larry Summers says the U.S. economy has been in recession in two years every time inflation surpasses 4% and unemployment is below 5% as it is now.
Moreover, Joe LaVorgna, who works at the White House predicts growth this year of just under 1%. Still, due to a strong labor market and household savings, he expects any downturn to moderate.
