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Ex-Fed Chair Has Dire Prediction for US Economy

Former Federal Reserve Chair Alan Greenspan warned Americans that an economic recession is the “most likely outcome,” as the central bank continues to tighten monetary policy to fight inflation.

Former New York Federal Reserve President William Dudley reinforced Greenspan’s claims, saying that a U.S. recession is “likely” forthcoming because the Federal Reserve’s rate hikes are inducing one.

Chief Investment Officer for Wealth and Investment Management Darrell Cronk reacted, Wednesday, to the former Federal Reserve officials’ grim predictions for 2023, telling FOX Business’ “Making Money” guest host Lauren Simonetti he agrees that a recession is the “likely outcome” to the U.S.’s feeble economy.

“I tend to agree more with Alan Greenspan that it’s {recession] probably the likely outcome,” Cronk said Wednesday.

“And keep in mind, it’s not just interest rate hikes or cuts for that matter. It’s the combination of the money, supply is tightening, the stronger U.S. dollar has put pressure on financial conditions. Bank reserves are running off. So there’s a whole myriad of other elements that are also conspiring to tighten financial conditions simultaneously,” Cronk explained on “Making Money with Charles Payne.”

On the other hand, he refuted Dudley’s argument that the Federal Reserve’s rate hikes are what’s causing a recession, clarifying that he doesn’t believe the incremental raises are solely responsible. While Cronk noted the Fed’s involvement is “a great point,” he said he would have to take “a little bit” of the other side of the argument into consideration.

“I’m not sure that just simply cutting rates would do it [avoid a recession]. There’s the lag effect that we all know about with monetary policy. So typically 6 to 9 months, which means, if you use that as the lag effect, we’re just now feeling the June 75-basis point and maybe the July 75-basis point hikes,” Cronk explained.

“We’ve yet to feel the 75 in September, the 75 in November and the 50 in December, and whatever else we do here in 2023. So that’s going to bite in the first half of 2023,” he added.

Cronk went on to argue that consumers are going to experience a “two-sided coin” in 2023 – with the first half of the year being particularly difficult – but said the second half is likely to see improvements.

“I think you get a strong rally in the second half, but, be weary of the first half because there’s a lot of pain yet to feel,” he cautioned.

“I mean, you know, everybody wants inflation to come down to two, two and a half percent, including Chair Powell of the Federal Reserve. But there’s a lot of pain to go from 6.7 on the CPI, 6.7 down to 2.0 between here and there,” Cronk concluded.

READ 1 COMMENT
  • ObamaBinBidenDestroysAmericaForGood says:

    I predicted before Biden even ended campaigning that he would destroy America
    Just like he tried doing in the late 70s with Peanut Brain Carter!! Biden was behind the Big Lie back then as he is now! Only back then it was the Energy Crisis because the world is tapped out of fossil fuels!! Now it’s the Climate Change BIG LIE!! Either way Biden is Behind it now and back then also!! Biden is the main reason the Jimmy Carter Administration was a complete failure!! Because Biden is the most corrupt evil psychopathic liar and Treasonous basterd that ever walked in DC and it’s a proven fact!!
    He is 1000x worse than Hitler!! He is SATAN!! He is a racist!! He funded the KKK
    He is destroying America!! Biden needs to be eliminated from humanity once and for all. As does the AntiChrist Obama!! He is the Biden Puppetmaster and he is orchestrating the entire collapse and destruction of America!! He hates our country and won’t stop until its destroyed entirely!! He must be eliminated NOW!!!

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