CPI inflation rate figures for June 2023 are due to be announced on Wednesday
Experts are warning that the US is on the brink of a “technical recession” depending on how this week’s inflation rate announcement goes.
Inflation has been on the rise the past year which has resulted in the Federal Reserve raising interest rates to mitigate the economic damage.
Last month, the Consumer Price Index (CPI) rate of inflation for May 2023 eased to four percent.
While this could be an indicator that the Fed’s recent actions are working, it is still double the two percent target for inflation set by the central bank.
Markets will be anxiously awaiting this week’s figures from the Bureau of Labor Statistics (BLS) to see if this was a temporary pause.
Further easing could be a sign that more interest rate rises will not be needed but other economic woes are also on the line.
Speaking to Daily Express US, finance expert Alp Sevimlisoy shared why a “technical recession” still might be on the cards.
A recession is defined as happening when a country experiences two-quarters of consecutive decline in economic growth, a fate the US has otherwise avoided.
He explained: “As a corporation, we expect that labor conditions shall continue to be tight in the run-up to the 2024 election in the US.
“With regard to inflation, the US with strong domestic economy, is well placed to now treat the current inflation rate as the norm with asset prices at near peak levels and ultimately, will either avoid a recession or have a technical recession at the most.
“Furthermore, both the US Defense sector and the overall commodities market has been fundamentally superior to many peers and will go from strength to strength as per global developments and geopolitical events.”
Looking ahead to the 2024 election, the finance expert highlighted that the current Presidential frontrunners will have to focus on jobs in order to show the economy is improving and can be improved more.
Mr Sevimlisoy added: “Job retention will be far more important than job creation in the following months with interest rates peaking within the year and remaining at its high level until at least the end of the election cycle.
“The frontrunners today be they Former President Trump or President Biden shall both prioritize a ‘Keeping America Employed’ slogan vis-â-vis a post-election roadmap for voters covering everything from eventual tax cuts to a scheduled interest rate reduction over three years.”
Alp Sevimlisoy originally featured as per: Daily Express
