Recession Risk Rising
Amid fears the economy could be slipping into a recession, President George W. Bush abandoned his usually sunny rhetoric last week and painted a darker picture of the economy’s condition.
“We can’t take growth for granted,” Bush said last week in Chicago, acknowledging that “recent economic indicators have become increasingly mixed.”
With foreclosures rising and home values plunging, Bush is considering a series of economic measures, but it isn’t clear what kind of package would pass Congress in an election year. Speculation is mounting that Bush could unveil a stimulus package for the economy in his annual State of the Union address which he is due to deliver on January 28.
Meanwhile, Federal Reserve Chairman Ben Bernanke said this week that the central bank is not predicting a recession, but sees “slow growth ahead.”
“The Federal Reserve is not currently forecasting a recession,” explained Bernanke, responding to a question asked after his speech. “We are forecasting slow growth.”
Bernanke hinted that more U.S. interest rate cuts may be needed to shore up economy in the face of a prolonged housing slump.
But according to the Wall Street Journal: “the Federal Reserve can’t flip its easy-money switch and immediately end the credit crunch, forestall home foreclosures, and leap tall buildings at a single bound.”
What do you think? Are we headed for a recession? Are we already there? RealtyTrac wants to know.