US Recession risk hits 72%: may cost Biden second term

Bloomberg: Soaring prices are hurting Americans. The cure is going to hurt, too. It may take a recession to stamp out inflation — and it’s likely to happen on President Joe Biden’s watch. A downturn by the start of 2024, barely even on the radar just a few months ago, is now close to a three-in-four probability, according to the latest estimates by Bloomberg Economics. 

“Investors are rushing to bet on that kind of bad outcome, sending stocks and bonds plunging. American households, watching their retirement funds dwindle as their grocery and utility bills soar, say they feel gloomier about the economy than at any time in more than four decades. “

All of this, it’s worth pointing out, is happening at a time when US consumers are still flush with cash and jobless rates are near historic lows. 

Blame Game

The S&P 500 stock index is down about 20% from January’s peak, and the average mortgage rate has almost doubled since then — climbing close to 6%, the highest since 2008.

Those market moves are driven by the Fed’s pivot. They illustrate how, long before the central bank’s new policy can achieve much in the way of cooling off prices, it’s already denting wealth and adding to financial costs for ordinary Americans.

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