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Recession Odds Spike as Biden's Economy Spirals Perilously Out of Control: The Cost of Illegitimacy


Recession Odds Spike as Biden Economy Continues to Spiral Out of Control


March 23, 2023: After the recent Silicon Valley Banking crash, many experts are signaling a projected recession. During a bank crisis, the Federal Reserve’s primary responsibility is to maintain stability in the financial system and prevent a collapse of the banking system, however, many experts are warning that it is too late under Biden’s economy.


“It adds up to an impossible choice the Federal Reserve has to make when officials meet on Wednesday: Slow down the pace of interest rate hikes or plow ahead to bring down resurgent inflation and risk amplifying damage to the economy.” Fortune wrote, “But as far as the Fed is concerned, hopes of engineering a soft landing for the economy and avoiding a recession may already be in the rearview mirror.”


Right now, the Fed has a tough decision to make. On one hand, they could slow down the pace at which they’re raising interest rates. This might help prevent inflation from getting worse, but it could also mean the economy doesn’t grow as fast. On the other hand, they could keep raising interest rates to bring down inflation, but this could cause problems for the economy and even lead to a recession.

JPMorgan strategists led by Marko Kolanovic, the bank’s chief global markets strategist, wrote in a message to clients Monday, “The Fed is facing a difficult task on Wednesday, but it is likely already past the point of no return.


He continued, “a soft landing now looks unlikely, with the airplane in a tailspin (lack of market confidence) and engines about to turn off (bank lending).”


The Fed has the authority to regulate banks and monitor their activities to ensure they are operating in a safe and sound manner. This includes conducting regular bank examinations, setting capital requirements, and enforcing rules and regulations.

The Fed often works closely with other regulatory agencies, such as the FDIC and the Treasury Department, to coordinate efforts to address a banking crisis.


“Even if central bankers successfully contain contagion, credit conditions look set to tighten more rapidly because of pressure from both markets and regulators,” JPMorgan wrote.

The central bankers (the people who manage a country’s monetary policy, such as the Federal Reserve in the United States) may try to prevent this contagion from spreading and causing further problems.


However, even if the central bankers are successful in containing the contagion, credit conditions (the availability and cost of borrowing money) may still become more difficult for businesses and consumers. This is due to pressures from both the financial markets (i.e., investors and traders) and regulators (the government agencies that oversee financial institutions and markets).


In simpler terms, even if the central bankers can stop a financial problem from getting worse, it may still become harder for people and businesses to get loans because of other pressures under the Biden administration.



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