Economic Data Prompts Renewed Recession Fears
Summary from the AllSides News Team
New economic data has some experts worried about a possible recession in late 2023 or 2024, despite hopes for a post-pandemic “soft landing.”
The Details: The yield on 10-year Treasury notes, a benchmark for loans, has steadily risen in recent months, briefly climbing over 5% on Wednesday. That, and the Federal Reserve’s interest rate hikes, make it harder to borrow money, thereby slowing economic activity. The overall supply of money in the economy has also contracted.
The Pessimists: JPMorgan CEO Jamie Dimon warned of two “storm clouds” that could spur a recession: fiscal instability at home and geopolitical instability abroad. “I don't think inflation will keep on coming down,” Dimon told Bloomberg (Lean Left bias), adding that the Federal Reserve could push interest rates higher to stabilize inflation.
The Optimists: Not everyone thinks we’re doomed. Regional Federal Reserve Bank Presidents Austan Goolsbee and Thomas Barkin argued separately that recent data likely reflected a return to normal pre-pandemic trends. IMF chief Kristalina Georgieva said the global economy could still escape a recession, despite substantial risks.
How the Media Covered It: Despite some optimism from officials, media voices appeared to highlight economic dangers. Multiple Bloomberg writers said the U.S. economy was “now breaking in plain sight” and told readers to “brace for a US recession.” One Fox Business (Lean Right bias) op-ed appeared particularly sensational, warning of a potential “crash not seen since Great Depression.”
Featured Coverage of this Story
From the Right
Soaring US bond yields stoke fears of ‘hard landing,’ increase risk of recession
The surge in long-term Treasury yields is likely to keep interest rates high — jeopardizing the Fed’s long-crafted plans for a soft landing, Wall Street analysts said.
The yield on 30-year Treasuries, which is the annual interest rate that the US government pays on its debt obligations, briefly surpassed the 5% threshold on Wednesday before retreating to 4.89% after the Labor Department released its latest unemployment figures Thursday.
The high bond yields make it more expensive for consumers and companies to borrow money, thereby undercutting the economy and increasing the risk of a...
From the Left
We thought we avoided recession. Turns out we're not in the clear yet.
The hope of a soft landing for the US economy heated up over the summer, but now signs and attitudes are shifting to be more negative again.
Even as interest rates skyrocketed over the past 18 months, a good job market and strong consumer spending kept the US economy moving. This had experts and investors feeling a bit more optimistic that inflation could be defeated without a recession.
In an August economic policy survey, the National Association of Business Economics found that 69% of business economists polled called a soft landing at least somewhat likely — up from...
From the Center
Fed's Goolsbee does not see rise in long-term yields imperiling soft landing
Chicago Federal Reserve Bank President Austan Goolsbee says he sees no clear signals that the U.S. economy is veering off the "golden path" toward the Fed's 2% inflation goal and at the same time averting a recession, even as the recent surge in long-term Treasury yields has some analysts questioning exactly that.
"On the real side I feel like nothing has happened so far that is convincing evidence that we are off the golden path," Goolsbee said on Bloomberg's Odd Lots podcast, recorded on Tuesday and aired on Thursday. "I...
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