CEI Senior Economist Ryan Young pointed to new data on the economy’s impressive growth in the third quarter of 2023 as evidence that the Fed’s inflation fighting policies have not caused a recession, as some feared.
Statement by Ryan Young:
“Last quarter the economy grew at 2.1 percent, yet 44 percent of Americans thought the economy was in a recession. It will be interesting to see what polls will say now, with the economy growing at 4.9 percent.
“While this spike is likely temporary, it is still good news. The Fed’s inflation-fighting efforts have not slowed growth, and unemployment remains under 4 percent. It is time to put to rest fears that taming inflation must cause a recession.
“Interest rates are going to stay high for a while. This will put a dent in mortgages and lending. Businesses will have a harder time raising capital. Growth will likely slow down in the next few quarters to more normal levels. This is all part of the hidden tax that is paying for the 17 percent total inflation caused by Washington’s COVID hyper-stimulus. Even so, there is no need to fear a recession, even with the public’s pessimistic bias.”