US 'slowing towards a recession,' if it's not already in one, former Kansas City Fed president warns
Can the Fed attain a soft landing as the central bank tries to curb red-hot inflation?
Thomas Hoenig, the former Kansas City Federal Reserve president, weighs in, arguing that a ‘recession is a fair call.’
Thomas Hoenig, who served as president of the Federal Reserve Bank of Kansas City, said on Wednesday that he doesn’t see a "mild soft landing coming our way" as inflation sits at 40-year highs.
He stressed during a ‘Mornings with Maria’ appearance, Wednesday morning, that he doesn’t "know of an easy way" of bringing inflation back down towards the Fed’s goal of 2% or less without causing a recession.
A recession refers to a contraction in gross domestic product (GDP) activity, the broadest measure of goods and services produced across the economy, for two consecutive quarters.
It was revealed in late April that the U.S. economy cooled markedly in the first three months of the year, as snarled supply chains, record-high inflation and labor shortages weighed on growth and slowed the pandemic recovery.
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The Commerce Department said last month, in its second reading of the data, that real GDP decreased at an annual rate of 1.5% in the first quarter of this year, which was slightly higher than the department’s first reading.
Earlier this month it was revealed that inflation remained painfully high in May, with consumer prices hitting a new four-decade high that exacerbated a financial strain for millions of Americans.
The Labor Department said that the consumer price index, a broad measure of the price for everyday goods, including gasoline, groceries and rents, rose 8.6% in May from a year ago. Prices jumped 1% in the one-month period from April. Those figures were both higher than the 8.3% headline figure and 0.7% monthly gain forecast by Refinitiv economists.