There is no recession in the baseline scenario and stress affects a small fraction of banks, says Fed official By Estadão Content

2023-05-05 20:52:20

© Reuters. There is no recession in base case and stress affects small fraction of banks, says Fed official

The chairman of the Federal Reserve (Fed, the US central bank) of St. Louis, James Bullard, said this Friday, the 5th, that the base scenario of the monetary authority of the United States is not of a recession in the country, but of a “soft landing”, of lower growth and deceleration in the job market. . In an event, interviewed by the President of the Minneapolis Fed, Neel Kashkari, Bullard minimized the recent stresses on the US banking system, noting that what happened was in a small number of regional banks and that the institutions should be fine.

“The American economy is doing well and loan portfolios are being paid”, highlighted the leader.

Bullard highlighted that Wall Street is betting “heavily” on the scenario of economic contraction. “I don’t think that monetary policy alone would put the US into recession. A kind of shock would be necessary”, highlights the leader, indicating that such shocks are not predictable.