U.S. economy will likely fall into recession, former Fed official says

Submitted by predictany007 t3_ydzqbh in wallstreetbets

Expecting more tightening, Ferguson said during the annual Mortgage Bankers Association Conference in Nashville, Tenn., on Tuesday.

Ferguson expects a 75-basis-point hike at the Nov. 1-2 policy meeting, then 50 basis points in December, and perhaps 25 basis points early next year.

"I fear that if I'm wrong, it's because I've underestimated how much more they have to do," he added.

"At the end of the day, we're likely to see a shortened, shallow recession at the end of next year," Ferguson said. "Not upbeat, but [I'm] here to be honest with you."

Ferguson also said that he expects the 10-year Treasury yield to go up to 5% and only come off from that level very slowly. The 10-year is currently trading just above 4%.

And if "the next CPI report is really high," then there may be Fed officials who may want to push rates even higher.

Full article: https://www.marketwatch.com/amp/story/u-s-economy-will-likely-fall-into-recession-former-fed-official-says-11666726763

Former Federal Reserve vice chairman Roger Ferguson says the U.S. central bank will continue to hike rates multiple times this year, but at a slower pace, and that the economy is headed to a recession at the end of next year. Do you agree?

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VisualMod t1_ituzbnc wrote

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>TL;DR: The former Federal Reserve vice chairman says the U.S. economy is headed for a recession at the end of next year, and that the central bank will continue to hike rates multiple times this year, but at a slower pace.

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VisualMod t1_ituzcby wrote

>I agree that the economy is likely to enter a recession at the end of next year. The Fed has been hiking rates too slowly and needs to move faster in order to prevent an economic downturn.

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rwang411 t1_ituzjb1 wrote

Umm, we’ve been in a recession for months, despite WH attempts to redefine

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The_way_2_tendies t1_itv74el wrote

“Inflation is transitory” meaning we’re only in a recession until we’re not in a recession. So since its not permanent, we’re not in a recession -Some Genius at the white house drinking (whatever they identify as today) soy frap 2% reduced steamed almond milk, with unicorn sprinkles and notes of self affirmation.

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Equivalent-Step1515 t1_itvnl6j wrote

Yes. But rate increases following the election are likely to be higher, not lower. While headline inflation is stalling, core continues to rise. October core will be a shock to the pivot crowd.

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