escaping stagnation | Economic newspaper

The US economic legislative authorities are doing everything they can to keep the pace of domestic economic performance indicators within their current range. In the sense that the current slowdown will certainly be better than reaching the expected recession. Over the past months, the US administration has tried to enhance this performance, despite the negative effects left by the monetary tightening policy, through periodic increases in public interest rates, which reached 4.75 percent in the latest Federal Reserve review, the highest in decades. There is no doubt that lawmakers currently have no choice but to curb inflation, which has reached 6.5 percent, while indicators and analysts’ expectations indicate that it will remain for a period that will not be short, meaning that this level will remain high until at least the end of 2024.
Because this is the case, the possibility of the world’s largest economy entering a recession is expected now more than ever, although some previously indicated the possibility of the US economy growing by 1.4 percent for this year. But there are no real guarantees that this will happen, at least in the short term. Even if inflation declines by the end of this year to 4 percent, which is not realistic in the eyes of many observers, it will still be above the official announced level of 2 percent. In fact, this percentage is adopted in all advanced economies, but it was not achieved even before the outbreak of the Corona pandemic, the current war in Ukraine, and the consequences of the disturbing inflationary wave on the global economic scene in general.
Janet Yellen, US Treasury Secretary, believes that the US economic situation is in good shape, although she pointed to a series of challenges. She hopes (like other financial lawmakers) that the country’s economy will witness what she called a “soft landing”, meaning reducing inflation without reaching the recession line. This is not easy, although the conditions of the labor market at the local level are really good, in addition to the fact that there are no real problems at the level of the global budget, as they existed before the outbreak of the global economic crisis in 2008. The main task now on the American scene is the success of aligning the interest High is expected to continue to increase in the coming period, regardless of the level of periodic increase in it, and the preservation of the local economy in the range of slowdown.
Some American economic observers do believe that the economy is currently going through a period of recession, but the real indicators do not indicate that. The dominant feature of this economy is the slowdown, which could witness a decline or progress towards recession before the middle of this year at least. That is, the US economy is currently standing in the middle. No positive signs of growth can be seen in the next phase, in light of the monetary tightening policy. And this policy is not (by the way) exclusive to the United States. It is the only tool in the hands of lawmakers seeking to bring down the truly hyperinflationary waves.
Hence, the US economy may enter the circle of recession before the end of this year, and it may continue in this circle until the middle of next year. The battle will continue between reducing inflation and avoiding recession, and this is an equation in which there are many obstacles and obstacles, not in the United States, but in all advanced economies without exception.