The U.S. May Already Be in a Recession
Posted on 05/01/2022
The U.S. economy shrunk at a 1.4% annualized pace, measured in GDP, in the first quarter of 2022, according to data from the U.S. Bureau of Economic Analysis. The bureau has been calculating GDP figures since 1947. Economists typically agree that a recession is at least two consecutive quarters of negative GDP.
The Federal Reserve has tremendous impact on the U.S. economy. The raising of rates and the manipulation of asset purchases can impact the cost of funds, which in turn, impacts borrowing, refinancing, and credit availability.
Stagflation
For the first time in over 40 years, the U.S. economy is facing stagflation in 2023 and 2024. Some global institutional investors are expecting some growth to moderate as the Federal Reserve embarks on tighter financial conditions. The current Fed policy could lead to a trajectory of stagflation, which could ultimately end up in a major recession.
Note: GDP stands for Gross Domestic Product.