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Staglfation Returns? Atlanta Fed Says US Economy on the Verge of Contraction as Inflation Stays High

excalibur

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Biden outdoing Carter.



Is the US economy about to enter a contraction period? Well, Jen Psaki and Brandon continue to insist that everything is awesome, but the Atlanta Fed and other economic watchers have a far different perspective.

From their point of view, the economy isn’t in a healthy spot right now, with the variables trending in a highly negative direction and GDP likely following those negative variables.

In fact, the Atlanta Fed, in its January 2022 GDPNow forecast, had much lower expectations for how much the economy will grow than the more optimistic initial estimate predicted. In its words:

The initial GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2022 is 0.1 percent on January 28. The initial estimate of fourth-quarter real GDP growth released by the US Bureau of Economic Analysis on January 27 was 6.9 percent, 0.4 percentage points above the final GDPNow model nowcast released on January 26.

That estimate is far different, as you can see in this chart, also provided by the Atlanta Fed:


gdpnow-forecast-evolution-1-300x235.gif



...

Yet worse, it’s not just some wayward Federal Reserve branch that’s worrying about a recession. The Bank of America, just slashed its economic growth prediction too, as ZeroHedge reports:


while not yet a recession, today Bank of America stunned market when it chief economist joined JPM in slashing his GDP for 2022, and especially for Q1 where his forecast has collapsed from 4.0% previously to just 1.0%, a number which we are confident will drop to zero and soon negative if the slide in stocks accelerates due to the impact financial conditions and the (lack of) wealth effect have on the broader economy.

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Moonglow

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See what happens when you taper the cheap dough the wealthy have access to?
 

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