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Fed to Put US Economy into a Recession After a Strong Start

The Federal Reserve Chair, Jerome Powell, is now starting to have questions about his wishes regarding the US economy. The Fed is reported to be putting the US economy into a recession. 

The US economy has just experienced a strong start in 2023, but the Fed still needs to be made better about its next steps. Many are left wondering whether or not the US central bank will fight inflation and force the economy to be free from the inflation zone.

As experts know, the US Fed could push the economy into a recession after seeing the data released a few days ago. It started from a slowing economy and an elevated unemployment rate, an unavoidable consequence of the Fed's interest rate increases.

The market seems constantly unchanged, so many doubt whether that is long enough to fight the US recession. Semafor mentioned doubts about the latest US inflation data.

She also said that the business and market sectors are constantly surprised. Then, the strong start experienced by the Fed became doubtful amid a loud economy with detailed sources of companies.


Data from Fed's Beige Book Shows If the US Economy Got a Strong Start in 2023, Fed Sticks to Hawkish Message!

The economy proved resilient to start the new year from the current economic conditions. This indicates steady consumer spending and stabilizes manufacturing activity. At least all of this data was released based on the Federal Reserve's latest Beige Book.

In its report on Wednesday, 2023, the Fed said that: "Overall economic activity increased slightly in 2023,". The Fed also continued that the outlook is less optimistic amid heightened uncertainty; contacts expected economic conditions to impress little in months ahead.

Besides that, the comments support economic conditions to be vastly surprised to go upside. And powered consumer spending is one of the determinants of the price index among critical data, which is said to determine the policy path until the FED makes a different decision.

Meanwhile, Bloomberg economics said: "The federal reserve's latest beige book shows uneven activity across districts. This is shown by the no change in economic activity and others seeing modest expansion so that this can bring economic conditions."

The New Year Fed compiles the Beige Book itself. It comes after Fed Chair Jerome Powell's testimony before congress. So this opens up a chance for the Fed to accelerate the pace of interest rate hikes, and the economy comes in strong.

Furthermore, policymakers have raised rates aggressively in the past year with a target to curb inflation at a 40-year high. Price pressure drives wage growth, while economists say the target is price stability.

Powell Said that if There is Still no Other Decision Regarding the Fed's Rate Move, the Fed is Still up in the Air

Continuing with these economic developments, the Fed is still on the verge of doubt. The latest data collected has made the Federal Reserve Chair, Jerome Powell, hesitant to decide on a higher and faster interest rate hike, mainly because the debate was still underway.

Powell told the US House of Representatives Financial Services Committee: "If and I stress that no decision has been made on this, but if the totality of data has indicated that faster tightening is warranted, then we will be prepared to increase the pace of rate hikes,"

He emphasized again that the Fed has yet to decide but will await upcoming jobs data. Fed policy impacted the economy because the central bank was facing the risk of recession, which is also a problem of the labour market.

The Fed's policy is currently being debated whether it will positively impact the US economy or even put it into a recession. The strong start experienced by the Fed in 2023 will continue to be faced by the Fed's uncertainty in determining interest rates.



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