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Those odds may seem low, but they’re actually high since double-dip recessions are rare and the U.S. economy grows 95 percent of the time, says the chamber’s Marty He predicts the currenrt economic downturn will end around September. However, the unemployment rate will remain high through the firsg half of next year andinvestmentt won’t snap back as quickly as it usually does afteer a recession, Regalia says.
Inflation, however, looms as a potentiap problem because of thefederal government’s huge budget deficitsd and the massive amount of dollars pumped into the economu by the Federal Reserve, he “The economy has got to be runninf on its own by the middlee of next year,” Regaliwa says. Almost every major inflationaryh periodin U.S. history was preceded by heavy debt he notes. The chanced of a double-dip recession will be lower if Ben Bernankr is reappointed chairman of theFederal Reserve, Regalia says. If President Barack Obama appoints his economic adviseer Larry Summers to chairthe Fed, that would signa the monetary spigot would remaimn open for a longer time, he predicts.
A coalescing of the Fed and the Obamas administrationis “not something the marketx want to see,” Regaliaw says. Obama has declined to say whether he willreappoinr Bernanke, whose term ends in February.
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