Risk of Recession Continues to Rise Amid Compounding Factors

Risk of Recession Continues to Rise Amid Compounding Factors

Risk of Recession, Continues to Rise, Amid Compounding Factors.

On April 28, the United States government released data showing that the economy shrank in the first quarter of 2022.

CNN reports that the latest data comes amid an increasing number of frightening headlines warning of an impending recession.

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Inflation has reached a 40-year high, impacting people's ability to purchase goods and sustain the economy.

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The Federal Reserve's approach to fighting inflation by raising interest rates also increases the risk of a recession.

The chairman of the Federal Reserve, Jerome Powell, has argued that policymakers can control inflation without triggering a recession.

The chairman of the Federal Reserve, Jerome Powell, has argued that policymakers can control inflation without triggering a recession.

CNN reports that the pandemic dramatically impacted supply chains, while Russia's invasion of Ukraine has driven up the cost of energy and food.

CNN reports that the pandemic dramatically impacted supply chains, while Russia's invasion of Ukraine has driven up the cost of energy and food.

Meanwhile, former Treasury Secretary Larry Summers warned that "stagflation" is also a possibility.

According to CNN, stagflation is a combination of rising prices from inflation and a stagnant economy.

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The Fed's current policy trajectory is likely to lead to stagflation, with average unemployment and inflation both averaging over 5 percent over the next few years — and ultimately to a major recession, Larry Summers, former Treasury Secretary, via 'The Washington Post'.

According to CNN, recessions usually don't last as long as expansions.

The Congressional Research Service found that average recessions between WWII and now lasted about 11 months