{"id":2149,"date":"2023-03-12T18:02:28","date_gmt":"2023-03-12T23:02:28","guid":{"rendered":"https:\/\/embarrdowns.com\/americans-believe-recession-is-coming-what-the-fed-is-doing-to-combat-inflation\/"},"modified":"2023-03-12T18:02:29","modified_gmt":"2023-03-12T23:02:29","slug":"americans-believe-recession-is-coming-what-the-fed-is-doing-to-combat-inflation","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/americans-believe-recession-is-coming-what-the-fed-is-doing-to-combat-inflation\/","title":{"rendered":"Americans Believe Recession is Coming: What the Fed is Doing to Combat Inflation"},"content":{"rendered":"

As economists grapple with the question of when and if a recession will hit, many Americans are convinced that a slump is inevitable. According to a Real Estate Witch poll, three-quarters (75%) of Americans believe a recession will strike in 2023, while 69% say one is already here. To make matters worse, a survey of 48 forecasters issued by the National Association for Business Economics found that 60% of respondents believe there is a higher likelihood of a recession in the next 12 months than there is of avoiding an economic downturn.[0]<\/a><\/sup><\/p>\n

The National Bureau of Economic Research (NBER) defines a recession as \u201ca significant decline in economic activity that is spread across the economy and that lasts more than a few months.\u201d[1]<\/a><\/sup> To declare and officially recognize a recession, three criteria must be met to some degree \u2013 depth, diffusion, and duration. If one criterion presents extreme conditions, it may partially negate weaker indications from a different criterion.[2]<\/a><\/sup><\/p>\n

A survey of economists conducted by the National Retail Federation found that 28% expect a recession to begin this quarter, compared to the 52% who held that view in December. Approximately one-third of people predict that a recession will begin in the second quarter, with an additional 21% predicting it will start in the third quarter.<\/p>\n

The U.S. Federal Reserve is currently trying to balance the need to control inflation with maintaining economic growth.[3]<\/a><\/sup> In order to battle inflation, authorities have typically applied monetary policy instruments, for instance increasing interest rates, to decelerate economic growth and reduce demand for goods and services.[4]<\/a><\/sup> An increase in interest rates can be detrimental if too drastic, as businesses and individuals will become less keen to invest or spend money.[4]<\/a><\/sup> This has led to many inquiries regarding recessions in general and how they are forecasted.<\/p>\n

The Fed has raised interest rates 4.5 percentage points so far since March 2022, and in February lifted interest rates by a quarter of a point, the smallest amount in 10 months.[5]<\/a><\/sup> However, recent data suggests that inflation is still not under control, leading many to believe that the Fed will have to keep hiking interest rates.[6]<\/a><\/sup><\/p>\n

Consumer spending is greatly impacted by inflation.[4]<\/a><\/sup> With prices increasing, individuals are required to devote more of their funds to basic needs, leaving less to be spent on extras.[4]<\/a><\/sup> According to a survey by the National Retail Federation, 55% of US consumers are cutting back on spending due to higher prices, and 64% are changing the way they shop.[4]<\/a><\/sup> This development can cause a decrease in customer trust and a decrease in economic activity.[4]<\/a><\/sup><\/p>\n

0. <\/span>“Are we in a recession? Will there be a downturn in 2023? Economists weigh in” msnNOW, 12 Mar. 2023, https:\/\/www.msn.com\/en-us\/money\/markets\/are-we-in-a-recession-will-there-be-a-downturn-in-2023-economists-weigh-in\/ar-AA18wQgG<\/a><\/a><\/p>\n

1. <\/span>“Are We in a Recession? 43% of Americans Think So” Money Talks News, 11 Mar. 2023, https:\/\/www.moneytalksnews.com\/are-we-in-a-recession-43-of-americans-think-so\/<\/a><\/a><\/p>\n

2. <\/span>“Part of a Cycle: A Recession Primer” TD Economics, 9 Mar. 2023, https:\/\/economics.td.com\/ca-recession-primer<\/a><\/a><\/p>\n

3. <\/span>“The Tricky Dynamic Between Stemming Inflation and a Mitigating a Recession” njbmagazine.com, 10 Mar. 2023, https:\/\/njbmagazine.com\/njb-news-now\/the-tricky-dynamic-between-stemming-inflation-and-a-mitigating-a-recession<\/a><\/a><\/p>\n

4. <\/span>“The Economy\u2019s Inflationary Woes: A Recession Looms Ahead” Industry Leaders Magazine, 12 Mar. 2023, https:\/\/www.industryleadersmagazine.com\/the-economys-inflationary-woes-a-recession-looms-ahead\/<\/a><\/a><\/p>\n

5. <\/span>“The economy has avoided a recession so far \u2014 and it could be a nightmare for the Fed” Yahoo Life, 7 Mar. 2023, https:\/\/www.yahoo.com\/lifestyle\/economy-avoided-recession-far-could-175254818.html<\/a><\/a><\/p>\n

6. <\/span>“Why the recession is always six months away” USA TODAY, 9 Mar. 2023, https:\/\/www.usatoday.com\/story\/money\/economy\/2023\/03\/09\/recession-six-months-away\/11434858002<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

As economists grapple with the question of when and if a recession will hit, many Americans are convinced that a slump is inevitable. According to a Real Estate Witch poll, three-quarters (75%) of Americans believe a recession will strike in 2023, while 69% say one is already here. To make matters worse, a survey of 48 forecasters issued by the National Association for Business Economics found that 60% of respondents believe there is a higher likelihood of a recession in the next 12 months than there is of avoiding an economic downturn.[0]<\/a><\/sup><\/p>\n

The National Bureau of Economic Research (NBER) defines a recession as \u201ca significant decline in economic activity that is spread across the economy and that lasts more than a few months.\u201d[1]<\/a><\/sup> To declare and officially recognize a recession, three criteria must be met to some degree \u2013 depth, diffusion, and duration. If one criterion presents extreme conditions, it may partially negate weaker indications from a different criterion.[2]<\/a><\/sup><\/p>\n

A survey of economists conducted by the National Retail Federation found that 28% expect a recession to begin this quarter, compared to the 52% who held that view in December. Approximately one-third of people predict that a recession will begin in the second quarter, with an additional 21% predicting it will start in the third quarter.<\/p>\n

The U.S. Federal Reserve is currently trying to balance the need to control inflation with maintaining economic growth.[3]<\/a><\/sup> In order to battle inflation, authorities have typically applied monetary policy instruments, for instance increasing interest rates, to decelerate economic growth and reduce demand for goods and services.[4]<\/a><\/sup> An increase in interest rates can be detrimental if too drastic, as businesses and individuals will become less keen to invest or spend money.[4]<\/a><\/sup> This has led to many inquiries regarding recessions in general and how they are forecasted.<\/p>\n

The Fed has raised interest rates 4.5 percentage points so far since March 2022, and in February lifted interest rates by a quarter of a point, the smallest amount in 10 months.[5]<\/a><\/sup> However, recent data suggests that inflation is still not under control, leading many to believe that the Fed will have to keep hiking interest rates.[6]<\/a><\/sup><\/p>\n

Consumer spending is greatly impacted by inflation.[4]<\/a><\/sup> With prices increasing, individuals are required to devote more of their funds to basic needs, leaving less to be spent on extras.[4]<\/a><\/sup> According to a survey by the National Retail Federation, 55% of US consumers are cutting back on spending due to higher prices, and 64% are changing the way they shop.[4]<\/a><\/sup> This development can cause a decrease in customer trust and a decrease in economic activity.[4]<\/a><\/sup><\/p>\n

0. <\/span>“Are we in a recession? Will there be a downturn in 2023? Economists weigh in” msnNOW, 12 Mar. 2023, https:\/\/www.msn.com\/en-us\/money\/markets\/are-we-in-a-recession-will-there-be-a-downturn-in-2023-economists-weigh-in\/ar-AA18wQgG<\/a><\/a><\/p>\n

1. <\/span>“Are We in a Recession? 43% of Americans Think So” Money Talks News, 11 Mar. 2023, https:\/\/www.moneytalksnews.com\/are-we-in-a-recession-43-of-americans-think-so\/<\/a><\/a><\/p>\n

2. <\/span>“Part of a Cycle: A Recession Primer” TD Economics, 9 Mar. 2023, https:\/\/economics.td.com\/ca-recession-primer<\/a><\/a><\/p>\n

3. <\/span>“The Tricky Dynamic Between Stemming Inflation and a Mitigating a Recession” njbmagazine.com, 10 Mar. 2023, https:\/\/njbmagazine.com\/njb-news-now\/the-tricky-dynamic-between-stemming-inflation-and-a-mitigating-a-recession<\/a><\/a><\/p>\n

4. <\/span>“The Economy\u2019s Inflationary Woes: A Recession Looms Ahead” Industry Leaders Magazine, 12 Mar. 2023, https:\/\/www.industryleadersmagazine.com\/the-economys-inflationary-woes-a-recession-looms-ahead\/<\/a><\/a><\/p>\n

5. <\/span>“The economy has avoided a recession so far \u2014 and it could be a nightmare for the Fed” Yahoo Life, 7 Mar. 2023, https:\/\/www.yahoo.com\/lifestyle\/economy-avoided-recession-far-could-175254818.html<\/a><\/a><\/p>\n

6. <\/span>“Why the recession is always six months away” USA TODAY, 9 Mar. 2023, https:\/\/www.usatoday.com\/story\/money\/economy\/2023\/03\/09\/recession-six-months-away\/11434858002<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":2148,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/2149"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=2149"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/2149\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/2148"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=2149"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=2149"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=2149"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}