{"id":7097,"date":"2022-09-26T15:07:04","date_gmt":"2022-09-26T20:07:04","guid":{"rendered":"https:\/\/nwfl4sale.com\/2-fed-officials-we-can-still-avoid-a-recession\/"},"modified":"2022-09-26T15:07:04","modified_gmt":"2022-09-26T20:07:04","slug":"2-fed-officials-we-can-still-avoid-a-recession","status":"publish","type":"post","link":"https:\/\/nwfl4sale.com\/2-fed-officials-we-can-still-avoid-a-recession\/","title":{"rendered":"2 Fed Officials: We Can Still Avoid a Recession"},"content":{"rendered":"
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Boston Fed official acknowledged \u201capprehension about the possibility of a significant downturn,\u201d but says \u201ca more modest slowdown, while challenging, is achievable.\u201d<\/span><\/span><\/p>\n<\/div>\n oston, said Monday that a higher unemployment rate will be needed to bring down inflation from unusually high levels, but also suggested any economic downturn would likely be modest.<\/span><\/span><\/p>\n In her first speech as Boston Fed president, Collins said the economy is resilient enough to withstand the higher interest rates needed to combat inflation, which is near a four-decade high. Her comments echoed similar remarks from Raphael Bostic, president of the Atlanta Fed, on Sunday. Fed Chair Jerome Powell has also said that fighting inflation would cause \u201cpain\u201d for households and businesses.<\/span><\/span><\/p>\n \u201cAccomplishing price stability will require slower employment growth and a somewhat higher unemployment rate,\u201d Collins said in a speech to the Greater Boston Chamber of Commerce.<\/span><\/span><\/p>\n Collins acknowledged that job losses are painful and said \u201cthere is apprehension about the possibility of a significant downturn.\u201d Yet she maintained that \u201cthe goal of a more modest slowdown, while challenging, is achievable.\u201d<\/span><\/span><\/p>\n Her comments added to an ongoing debate about how badly the Federal Reserve\u2019s ongoing interest rate increases \u2013 the fastest in more than 40 years \u2013 will hurt the economy. By lifting its benchmark rate, the Fed is pushing up the cost of a wide range of consumer and business loans, including mortgages, auto loans, and credit cards.<\/span><\/span><\/p>\n Fed officials hope those increases will achieve a \u201csoft landing\u201d by slowing consumer and business spending enough to bring down inflation but not so much as to cause a recession.<\/span><\/span><\/p>\n Yet many economists are increasingly skeptical that such an outcome is likely. The Fed has lifted its key rate to a range of 3% to 3.25%, the highest in 14 years, yet job growth remains solid and consumers are still spending at a decent pace. That suggests the Fed may have to push rates higher than expected to slow consumer demand and inflation.<\/span><\/span><\/p>\n At a policy meeting last week, the Fed lifted its short-term rate by three-quarters of a point for the third straight time. Fed Chair Jerome Powell, at a press conference after the meeting, said that \u201cthe chances of a soft landing are likely to diminish\u201d as the Fed steadily raises borrowing costs.<\/span><\/span><\/p>\n \u201cNo one knows whether this process will lead to a recession or, if so, how significant that recession would be,\u201d Powell said.<\/span><\/span><\/p>\n Collins is one of 12 voting members of the Fed\u2019s policymaking committee and is the first Black woman to serve as president of a regional Fed bank. She was sworn in July 1. Collins previously served as executive vice president at the University of Michigan and served on the board of directors for the Chicago Fed.<\/span><\/span><\/p>\n Atlanta Fed President Bostic, in an interview Sunday on CBS News\u2019 \u201cFace the Nation,\u201d also said \u201cwe need to have a slowdown\u201d to get inflation under control.<\/span><\/span><\/p>\n \u201cBut I do think that we\u2019re going to do all that we can at the Federal Reserve to avoid deep, deep pain,\u201d he added.<\/span><\/span><\/p>\n Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission<\/span><\/span><\/p>\n<\/div><\/div>\n <\/p>\n <\/p>\n