Joe Biden says the US economy can deal with inflation.

Highlights:

• Americans are getting increasingly worried about recession as inflation continues to bite the US economy. 

• Google search trends show more and more people in the US are looking up the word “recession.” 

• Economists are predicting the US will tip into a recession as the Fed plays a dangerous game of catch-up. 

President Joe Biden says he’s confident a US recession isn’t inevitable, but inflation is soaring, the Federal Reserve is about to deliver a set of rate hikes at breakneck speed and ordinary Americans are getting worried.

Speaking to the Associated Press Thursday Biden said the US economy wouldn’t necessarily fall into recession, even as growth slows and inflation stays strong.

“First of all, it’s not inevitable,” he said. “Secondly, we’re in a stronger position than any nation in the world to overcome this inflation.”

Following the Fed’s sharp interest rate hike, a growing concern among investors is the possibility of a central bank policy mistake, according to JP Morgan.

A policy mistake is the idea that the Fed was too late to hike interest rates to tame inflation, and in response may go too far in its tightening plans, which can in turn break the economy and result in future interest rate cuts.

Judging by analysis by various economic experts, billionaires, investors, players in the stock market, and even officials in the government, the economy is going into a tailspin and markets are set to plunge 40 per cent, a cause for concern as at least six out of 10 Americans put their savings in the stocks hoping to grow their earnings. But ‘Don’t Panic’ is the advice of players in the stock market.

Billionaire and big-time hedge fund investor Leon Cooperman says the US economy will go into a recession and stocks will fall much further.

He told CNBC Tuesday the S&P 500 would fall 40 per cent in total from peak to trough. He said the index might not bounce back until it hits 3,000 – 20 per cent below Monday’s close.

US stocks have a long way left to fall, says the hedge-fund veteran Cooperman, who has predicted the economy will tumble into a recession in 2023.

A total drop of 40 per cent is what he predicts as he feels recession has battered corporate profits. He said equities were unlikely to head back into a bull market anytime soon.

This is based on the trend that in recent times, investors have dumped stocks in 2022 as the Federal Reserve has embarked on what is likely to be one of the fastest interest-rate-hiking cycles in its history in an effort to tame rampant inflation. Even the crypto exchange is down by 86 percent. 

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