James Gorman, the CEO of Morgan Stanley, said there’s a 50% chance the United States is going into recession during a speech Monday.
“It’s possible that we go into recession, and it’s now roughly 50-50 odds,” Gorman remarked at a conference which was hosted by Morgan Stanley, as reported by Reuters. “I do not believe we’re getting into some kind of hole in the next few years; I believe the fed will eventually get control of inflation.” “You know it’ll be rough; 401(k) plans will suffer this year.”
But Gorman added, “If the United States were to go into a recession, it would not be ‘deep and long’ in nature.”
In the previous four decades, living costs have never been higher. The Consumer Price Index rose by 8.6% over the last year.
Sales of new houses fell 16.6 percent in April, and interest rates have climbed to 5.25 percent from 3.1 percent at the start of the year.
“The entitled generation” is about to learn what it means to deal with shortages, according to BlackRock President Rob Kapito in March.
“The first time that this generation will go into a store and won’t be able to get what they want,” Kapito warned.
On the other hand, Federal Reserve Chair Janet Yellen stated that the US was not experiencing a recession and would continue to improve. “I don’t believe we’re going to have a recession,” she said on June 9th.”
Inflation numbers have been at record highs, but Yellen is not concerned.
“I think that the data that we have received recently points to a strengthening in the labor market,” she said on June 12th.
This is of course crazy and does not align with what Americans are experiencing in their personal finances. With gas prices, food prices and utility bills all on the rise, it is hard to imagine how Yellen could make such a statement.
According to the Federal Reserve’s own data, Americans’ day-to-day spending habits suggest that many are still struggling.