President Joe Biden told CNN’s Jake Tapper on Tuesday that the prospect of a “slight recession” is possible but that he doesn’t anticipate it – even as experts are sounding the alarm about the future of the American and global economies.
“I don’t think there will be a recession. If it is, it will be a very slight recession. That is we’ll move down slightly,” Biden told Tapper in his first exclusive interview with CNN since taking office, adding later, “It is possible. Look, it’s possible. I don’t anticipate it.”
Investors, economists and banks, however, are all warning that the US is likely to enter a recession in the coming months.
Stocks dipped on Monday after JPMorgan Chase CEO Jamie Dimon warned that the US is likely to enter a recession within the next six to nine months. And last month, 72% of economists polled by the National Association for Business Economics said they expected the next US recession will begin by the middle of next year – if it hasn’t already started.
Bank of America said this week that the Federal Reserve’s fight to squash inflation by continuing to aggressively raise interest rates will cause the US economy to start losing tens of thousands of jobs a month beginning early next year.
Worries about inflation – and the increased likelihood of even more huge interest rate hikes from the Federal Reserve – have been spooking Wall Street again and sending long-term bond yields higher. And though it may not last for long, gas prices are continuing to rise again in most of the US.
Meanwhile, on a global scale, the International Monetary Fund on Tuesday once again downgraded its forecast for the global economy with a sharp warning: “The worst is yet to come, and for many people 2023 will feel like a recession.”
All of the world’s largest economies are slowing, IMF managing director Kristalina Georgieva said last week, noting the energy crisis in Europe amid Russia’s war in Ukraine, China’s real estate collapse, and historically high inflation in the United States.
The President suggested on Tuesday that the United States’ ability so far to thwart a recession despite forecasts that raised broad concern give him some confidence in the future of the economy.
“Every six months they look down the next six months and say what’s going to happen. It hadn’t happened yet,” Biden said, adding that “they’ve been predicting this off and on.”
He also underscored his administration’s legislative accomplishments meant to help reduce costs, arguing, “We’re in a better position than any other major country in the world, economically and politically.”
Specifically, he referenced provisions in the Inflation Reduction Act. The act, signed into law in August, includes major changes to health policy by giving Medicare the power for the first time to negotiate the prices of certain prescription drugs and extending expiring health care subsidies for three years.
“I mean … so much has been accomplished that the idea that … there’s an automaticity to recession is just not … there,” Biden remarked. He later conceded that Americans “have reason to be concerned about energy prices. They have reason to be concerned about a whole range of issues. But look what we’ve done.”
With the midterm elections less than a month away, Biden also argued that Democrats have something to run on despite economic woes, saying Republicans are “gonna raise drug prices, raise medical costs, be sure that we’re going to no longer be able to have the ability to have tax credits for weatherizing your home, saving money. I mean, I don’t know what they’re for.”
CNN’s Matt Egan, Paul LaMonica, Julia Horowitz and Alicia Wallace contributed to this report.