Federal Reserve Bank of Richmond President Thomas Barkin said on Thursday in a speech that further economic slowdown in the United States is "almost surely on the horizon."
He explained that one of the reasons the country hasn't yet seen a recession is the COVID-19 pandemic, the effects of which are still present in the dislocated economy. "Businesses experienced severe shortages over the last few years. So, they tell me they are holding on to workers and investing in safety stock ... At the same time, consumers continue to spend, funded by excess savings," Barkin said.
He stated that Fed's fight against inflation has already "pushed several industries into mini-recessions." The policymaker added that as "pandemic-era fiscal support programs are ending" and monetary policy tightening works with a lag, it is likely that those who keep predicting a recession "will eventually be right."
