The United States economy can avoid a recession despite the measures taken by the US central bank to tackle high inflation. President Joe Biden said in an interview with the Associated Press.
Earlier this week, the Federal Reserve raised interest rates by its largest step in nearly 30 years to contain inflation.
Fed rate hikes should cool the economy, which should slow inflation. In the financial markets, there are fears of a recession in the US. The high inflation is also putting heavy pressure on the purchasing power of households because they spend more money on fuel and food and therefore have less left over for other expenses.
But according to Biden, the US economy is in good shape and in a stronger position than any other country in the world to weather the inflation crisis. A recession is “not inevitable,” Biden said.
He does acknowledge that Americans are gloomy about the economy. Last week, it emerged that US consumer confidence has fallen to its lowest level ever.
The inflation crisis is undermining Americans’ confidence in Biden. He has said fighting inflation is his top domestic priority. For example, Biden has asked oil companies why pump prices are so high and why more gasoline is not coming onto the market.