The Recession Question

Tom Barkin

Speech from Federal Reserve Bank of Richmond

Abstract: Inflation is too high. But the Fed has the tools to contain inflation over the medium-term, and we are committed to returning inflation to our target. The elevated concern about a recession is understandable. But the challenge in predicting a recession tomorrow is the strength of the aggregate data today. A slowdown from our current situation must be kept in perspective. We are out of balance today. Returning to normal doesn’t have to require a calamitous decline in activity. The Fed has the credibility with households, businesses and markets required to return inflation back to normal levels. There is of course recession risk along the way, but there’s also the prospect of the economy returning closer to normal.

Keywords: inflation; monetary policy; business cycles; economic growth (search for similar items in EconPapers)
Date: 2022-06-21
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