According to America’s top economists, inflation will remain above the Fed’s 2% target rate through 2024. In a new survey by the National Association for Business Economics (NABE), 59% of forecasters surveyed don’t believe inflation will reach the target rate until 2025 or later, with 42% citing “too much monetary tightness” as the most significant threat to the economy. Elon Musk and Mohamed El-Erian, among others, have criticized the Fed’s dangerous decision-making in recent weeks. Wharton professor Jeremy Siegel said, “They’re in dangerous territory of precipitating a recession.” Stoking the inflation fire has been the country’s continuous borrowing, possibly causing the US to default on its debts as soon as June 1. Experts warn that interest rates would soar and the global financial system would plunge into crisis; the White House Council of Economic Advisers is forecasting a deep recession and a 6.1% drop in GDP in the US alone. Yet, some, like financial writers like Quoth the Raven‘s Chris Irons, argue that a default could be the wake-up call America needs.
Fox Business/Eric Revell
Inflation to remain high for 2023, 2024: NABE survey
America’s top economists expect that inflation will remain persistently high through 2023 and 2024, according to a new survey by the National Association for Business Economics (NABE).
NABE released its May 2023 outlook survey on Monday which found that 98% of the business forecasters surveyed expect inflation, as measured by the consumer price index (CPI), to remain above the 2% year-over-year inflation rate targeted by the Federal Reserve.
The most recent inflation report that was released earlier this month put inflation at 4.9% year-over-year based on April data.
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The Telegraph via Yahoo Finance/Matthew Lynn
A US debt default is the wake-up call the world needs
Interest rates will soar. The stock and bond markets will crash. And the global financial system will be plunged into turmoil as investors flee to any safe asset they can find.
With every day that passes, the clock is ticking steadily closer to the deadline for a deal between President Joe Biden and Congress on lifting the debt ceiling for the United States.
If a deal isn’t done by June 1, the global economy, at least according to most of the experts, will be facing a catastrophe of epic proportions as the US defaults on its debts.
You can read the full article, here.
Markets Insider/Zinya Salfiti
The Fed has come under fire for the way it tackled inflation. Here are the latest critiques from Elon Musk, Mohamed El-Erian and others.
The Federal Reserve has come under much fire for pushing the US economy to the brink of a recession with its war on inflation, after failing to act earlier when the price pressures were still building.
Policymakers led by Jerome Powell dismissed the rise in inflation as “transitory” in 2021, but were forced into a series of sharp interest-rate hikes last year as consumer prices surged at the fastest pace in four decades. The Fed raised rates for a 10th straight time this month despite the rising risk of an economic slump, with the inflation rate still remaining more than twice its 2% target.
That has sparked strident criticism from business moguls such as Elon Musk and economists including Mohamed El-Erian, Jeremy Siegel and David Rosenberg.
You can read the full article, here.
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