Former Federal Reserve official: America is in recession
Eviralnews, citing Rashatoudi, Daniel DeMartino Butte, a former adviser to the Federal Reserve Bank (Central Bank of America) in Dallas, warned on Monday in a conversation with CNBC that the American economy is probably in a “simple recession” at the moment. .
These statements are made while the index of many world stock markets has fallen due to the fear of the weakening of the American economy.
According to this report, a cyclical or simple recession is one of the two types of recession caused by a demand problem. These recessions usually occur after periods of tight fiscal policy aimed at curbing excess demand or inflationary problems.
DiMartino Bot, the CEO and chief strategist of Quill Intelligence, emphasized that the economic recession in the United States started around last October.
He pointed to the weakening of the labor market and the increase in Chapter 11 bankruptcy cases. In addition, he said that the decrease in housing prices and the increase in the supply of apartments show that this trend may continue.
The U.S. economy faced an unexpected challenge in July as employment fell sharply and the unemployment rate rose for a fourth straight month, as interest rates hit businesses and households hard.
The U.S. unemployment rate rose to 4.3 percent in July from 4.1 percent in June, the highest level since the start of the Covid-19 pandemic in 2020, according to a report from the U.S. Bureau of Labor Statistics released Friday.
The number of unemployed people across the United States rose by 352,000 to 7.2 million, a significant increase from the 5.9 million registered a year earlier when the unemployment rate was 3.5 percent.
Friday's report fueled growing concerns that the Federal Reserve is waiting too long to cut rates. Concerns about the US recession shook global markets on Monday.
The Federal Reserve on Wednesday kept its key interest rate in the range of 5.25% to 5.50%, where it has remained for more than a year.
Federal Reserve Chairman Jerome Powell announced that the first post-pandemic rate cut could come as soon as September.
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