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Why 4 Fed Chairs See No Immediate Recession Risk


Hunter of Chin Li's Boo Hoo Flu
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Mar 25, 2010
Why 4 Fed Chairs See No Immediate Recession Risk

By James Langford Follow | 04/07/16 - 07:15 PM EDT

Paul Volcker, the Federal Reserve chairman for much of the 1980s, tamed the runaway inflation of the previous decade in part by making credit very, very expensive.

His successor, Alan Greenspan, soothed U.S. markets after the "Black Monday" crash of 1987 wiped out a fifth of their value, building a reputation as an economic soothsayer before handing over the office to Ben Bernanke in 2006.

Bernanke, a student of the Great Depression, helped lead the U.S. through the 2008 financial crisis -- an event prompted by widespread defaults in a mortgage market valued at $15 trillion -- in part by cutting interest rates to almost zero. He then passed the baton to Janet Yellen, the current chair, who presided over the first interest-rate increase since the crisis last December.

Each of them, in their own way, made a significant mark on U.S. financial affairs. Thursday night, they gathered in a first-of-its-kind event in New York to discuss the challenges and philosophies that influenced their decision-making, the role of the U.S. central bank and the current state of the U.S. economy.

One point they all agreed on: The U.S. isn't in a bubble economy, despite dire warnings from presidential candidates and some pundits.

The "economy has made tremendous progress in recovering from the damage from the financial crisis," Yellen said in response to the first question from the event's moderator, author and CNN host Fareed Zakaria. "Slowly but surely, the labor market is healing. For well over a year, we've averaged about 225,000 jobs a month, the unemployment rate now stands at 5%, and we're coming close to our assigned congressional goal of maximum employment."

The chairs don't see imminent risk of a recession, either, despite slow global growth, economic challenges in China and a slump in commodities driven partly by falling oil prices.

"I doubt very much if a recession is what our problem is," Greenspan added. "It's fundamentally an issue of growth over the long run."

In addition to questions from the moderator, the Fed chairs also fielded questions from the audience at International House, a non-profit residential center in upper Manhattan that organized the event. Founded by the Rockefeller and Dodge families in 1924, the site provides cross-cultural training for future global leaders.

Many questioners asked about political backlash that the chairs faced during their tenures: Volcker for high interest rates that hurt small businesses, and Bernanke for the bank bailouts in the late 2000s.

"It didn't make me happy," Bernanke quipped. But Fed chairs don't act in a vacuum, the panelists noted, and their power is far from unlimited.

"You've got a board, you've got a public, you've got reserve bank presidents," Volcker added. "You can't exactly do what you want without a lot of people being encouraged to agree with you, and sometimes to disagree with you."

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Midas Member
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Nov 25, 2013
Doesn't mean much to me. Officially these reptiles never see much of anything but blue skies ahead. Why worry when you can just hand off the printing press to the next unaccountable figurehead. We had significant economic turmoil heading into the last two presidential (s)elections despite assurances from fed talking heads that everything was everything and there are plenty of warning signs flashing here.

As far as the labor market goes, according to the BLS' own numbers we're hovering around 63% employment for working age Americans, which is only a few ticks higher than it was before women were "liberated" and sent off to the salt mines to support their families. Not to mention the fact that nobody sane would argue that the quality of jobs hasn't eroded significantly over that time.


Mother Lode Found
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Mar 31, 2010
They manipulate the metrics of the definition of a recession, therefore there will never be a recession or inflation, and they forgot to mention the last time they admitted there was one it was a year after the fact. We have never left the recession of 2007, the numbers have been changed to protect tptb and their minions, it gets worse by the month for 90% of the people.


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Apr 6, 2011
While people are dying in a drought the fed are insisting the data says it's raining. Political logic.