Chairman and Editor-in-Chief of Forbes magazine, Steve Forbes, told Fox Business Network that President Joe Biden will get blowback for his “happy talk” on inflation. Forbes insisted America is in a recession even if the downturn isn’t yet official, and blasted the Federal Reserve for hiking interest rates too aggressively and “making people poorer.”
Host Stuart Varney commented by expressing reservation about Biden’s remarks in an interview on CBS’ “60 Minutes” in which the president said that the monthly inflation rate was so low as to be basically negligible and that price pressure would continue to ease going forward.
Varney proclaimed he disagreed with Biden and predicted a “very difficult inflationary winter,” before asking Forbes on his opinion.
Forbes took a sympathetic view on that forecast, saying that “We’re going to have a hard winter and the Europeans are going to have it even worse.”
Further addressing Bidens’s remarks, Forbes said the president “overlooked” that inflation rising at 0.1% month-over-month pace in August, which Biden characterized as having inched up “hardly at all,” was higher than analysts expected and so was “disappointing” to markets.
Forbes continued saying, “This happy talk is going to hit him back hard. The president is doing all he can to make it impossible to recover from the inflation that comes from disrupting supply chains with his anti-fossil fuel policies that will put energy prices up.”
Forbes then predicted that the Federal Reserve would continue to hike interest rates and push the country deeper into a recession.
Forbes added, “That’s the only way they know how to get down prices, it’s by depressing the economy. Not the right way to do it and we’re all going to pay the price. And they will raise it’s benchmark interest rate by three quarters of a point on Wednesday, September 21 for a third consecutive meeting.”
And that is exactly what they did on Wednesday, just as Forbes predicted. He said, “The Fed is drastically raising interest rates into an economic downturn,” adding he believes “we’re in a recession,” regardless whether that designation is not yet official.
The rule-of-thumb definition for a recession is two consecutive quarters of negative GDP growth, which the United States recorded earlier this year. But the National Bureau of Economic Research (NBER) Business Cycle Dating Committee, the official recession scorekeeper, uses a broader definition and has not yet called it a recession.
The Forbes Editor-in-Chief concluded, “Maybe we’ll get a little blip upward in the third quarter, but we are in adownturn, and the Fed wants a downturn because the only way it knows how to fight inflation, is by making people poorer.” Forbes insisted that the country is in a recession regardless of how the label is officially defined.
With the Fed widely viewed as having been late to fight inflation, Fed Chair Jerome Powell has made remarks recently underscoring the central bank’s determination to crush price pressures even if it means higher unemployment and American households experiencing “some pain.”
Powell said in a speech on August 26, “Reducing inflation is likely to require a sustained period of below-trend growth. Moreover, there will very likely be some softening of labor market conditions.”
Powell added, “These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.”
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