Washington (awp / afp) – The American economy is slowing down but not to the point of falling into recession, the president of the New York branch of the American Central Bank (Fed) said on Tuesday.
“A recession is not currently my base case scenario,” John Williams said on CNBC. “I think the economy is strong,” he added.
“I expect growth to slow down a bit this year compared to what we had last year, (…) to 1%-1.5%,” he continued, noting that this is not a recession but a slowdown necessary to dampen inflation.
Central Bank forecasts in mid-June forecast US GDP growth of 1.7% in 2022, instead of 2.8% previously estimated.
He acknowledged that it is “very difficult to predict a recession which can occur for multiple reasons” and that the economy is not immune to unforeseen events.
But John Williams believes that “for now, there is a way forward to reduce inflation while keeping the economy growing”.
Asked about the possibility of the world’s largest economy suffering a shock from the outside, like the war in Ukraine, he replied that the Fed was monitoring “very carefully all the indicators, financial conditions, commodity prices and global growth”.
He is also scrutinizing the effects of tighter financial conditions and rising oil prices.
“Right now, consumer spending seems to be on the right track, we’re seeing a slowdown in some sectors,” he said.
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