IMF Slashes US Growth Forecast But Claims Recession Will Be 'Narrowly Avoided'

IMF Slashes US Growth Forecast But Claims Recession Will Be ‘Narrowly Avoided’

The IMF was one of the first establishment institutions to admit that inflation was a legitimate threat to the US economy last year, however, they were very late to the game compared to economists in the alternative media.  In March of 2021 IMF analysts were still arguing that inflation would be “transitory” despite the enormous $6 trillion covid stimulus in 2020 which was injected by the Federal Reserve directly into US retail markets through covid checks and PPP loans (helicopter money).  Nearly all of the IMF’s predictions on inflation turned out to be wrong.

This fact should be taken into consideration as the IMF now claims that US Growth will cool but recession will be ‘narrowly avoided’ while stating that the economy is ‘in recovery.’  The IMF does not really explain its logic on this prediction, but that’s usually how they operate.  Whenever they are wrong, they don’t admit it and they move on to the next wrong prediction.  Either that, or they know that circumstances are about to get worse and they don’t want the public to have the opportunity to prepare.

The IMF is predicting positive growth in US GDP this year even though GDP entered a decline in the first quarter of 2022 before the Federal Reserve began raising interest rates.  Prices also continue to rise in most necessities despite indications that the Fed plans to continue rate hikes through the year.  In the meantime, the jobs market is edging towards renewed losses as covid money and credit dry up.  In other words, the classic conditions for a stagflation crisis are in place.   

This means that even with recession pressures on the horizon price inflation remains a problem, which suggests that the Fed will have to continue raising interest rates in order to combat it.  Further recessionary consequences are baked into the cake on top of rising prices.

It should be noted that the IMF among many other globalist institutions and major banks warned only a month ago that a ‘dire’ global food shortage was on the way this year, and that a storm was on the horizon.  Yet, as soon as the Fed raised interest rate by a mere 75bps the establishment shifted to a different narrative, asserting suddenly that deflationary conditions will “balance out” price spikes.

The IMF seems to be painting a future economy in which the rest of the world is in crisis, but the US will be just fine.  And, like we saw with their inflation predictions, this fanciful notion should be taken with a grain of salt.   

Tyler Durden
Sat, 06/25/2022 – 18:00
Source: Zero Hedge News

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