"What they're saying: Asked if the U.S. risks a recession if the Fed doesn't keep cutting rates, Bessent told CNN's Jake Tapper, "I think we are in good shape, but I think that there are sectors of the economy that are in recession." "The Fed has caused a lot of distributional problems with their policies." Between the lines: Bessent said the Fed could solve the "housing recession" with lower rates and help lower-income consumers who have more debt than assets."
"Without that, though, he said risks would rise. "I think that there are sections of the economy that could go into recession," he added. He did not say which sectors, though. What to watch: The government shutdown means key economic data isn't being collected or reported. It could be weeks, if not months, before there's any official indication of how the economy is actually performing."
The Federal Reserve cut interest rates this week but warned that a further cut in December is not guaranteed. Investors had been nearly certain of a December cut before the warning. Bessent said the overall U.S. economy is in good shape but multiple sectors are already in recession and that Fed policies have caused distributional problems. Lower rates could alleviate a housing-sector downturn and aid lower-income consumers who hold more debt than assets. Without rate relief, recession risks would rise in unspecified sectors. A government shutdown is preventing key economic data collection, delaying official assessments for weeks or months.
Read at Axios
Unable to calculate read time
Collection
[
|
...
]