IE Business Daily Business news for the Inland Empire.
The U.S. will probably avoid a recession during the next two years, so long as the Federal Reserve doesn’t raise interest rates more than it has said it plans to, according to a forecast.
Despite some signs of weakness, the U.S. economy continues to move forward thanks to the fiscal stimulus enacted in 2020 and 2021 to offset damage done by the pandemic, said Christopher Thornberg, director of the UC Riverside Center for Economic Forecasting & Development.
Thornberg spoke Thursday during the center’s 13th annual Inland Empire Economic Forecast Conference, which was as held at the Riverside Convention Center.
“The only possible thing that could tip things downward in the near-term is if the Fed applies even more aggressive quantitative tightening to control inflation than they’re now projecting,” said Thornberg, a co-author of the forecast, in a statement issued after the conference.
“Functionally speaking, policymakers went from maximum acceleration – the stimulus – to maximum braking – tightening by the Fed – over a single year, something that would create turbulence in even the healthiest economy.”
The United States and California will experience economic growth during the next year or so but at a slower pace than the previous year, and California is likely to recover all of the jobs it lost as a result of the pandemic by the year, the forecast states.
