From President Joe Biden to Elon Musk to Cardi B, many are wondering if – or when – there will be a recession in the United States.
Last week, the stock market officially entered a bear market, Wall Street’s term for a drop of more than 20% from its peak, after the S&P 500 recorded its worst week since the start of the coronavirus pandemic in 2020. Inflation is at 40-year highs, interest rates are rising rapidly and signs of a cooling economy appear in retail sales, job advertisements, and the housing market.
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Bear markets often accompany recessions even though one does not cause the other. But when investors are disappointed in stocks, concerns about the economy are often the main factor.
This is what people on Wall Street, in the White House and beyond have recently been saying about the possibility of an economic recession.
Biden: “There’s nothing inevitable about a recession”
Biden said a recession was “inevitable” in an interview with The Associated Press last week and described it Monday in response to questions from reporters.
“I spoke to Larry Summers this morning,” he said, mentioning the former treasury secretary, “and there’s nothing inevitable about a recession.”
Treasury Secretary Janet Yellen: “I don’t think a recession is completely inevitable”
Yellen echoed the president’s point, saying over the weekend that a recession is not “inevitable” in interview with ABC. He, however, “expects the economy to slow,” adding that “inflation is very high.”
Musk: Recession “more likely than not”
Musk, Tesla’s CEO, said Tuesday that “a recession is inevitable at some point.” More specifically, during an appearance at the Bloomberg Qatar Economic Forum, he said: “As for whether there is a recession in the near future, I think it is more likely than not.” He also confirmed that Tesla would lay off about 10% of its salaried workforce.
Goldman Sachs: Recession risk “higher and more loaded”
The possibility of a recession is growing more and more likely, analysts at Goldman Sachs wrote in a report Monday.
“We now see a higher recession risk and more of a burden,” they said, citing high inflation and energy prices.
They lowered their economic growth forecasts but did not predict that the economy would shrink. They put the probability of a recession next year at 30%, up from 15% previously, and the chance over the next two years at around 50%, up from 35% previously.
Cardi B: “When you think they’re going to announce…”
Cardi B, a Grammy award-winning rapper, asked his 23 million Twitter followers this month what they think of the impending economic downturn: “When do you think they’re going to announce that we’re going into a recession?”
This article originally appeared on The New York Times.