There is an 80% chance that the US will end up in a recession: Steve Hanke

There is an 80% chance that the US will end up in a recession: Steve Hanke

There is an 80% chance that the US will enter a recession — much higher than previously predicted, according to Steve Hanke, a professor of applied economics at Johns Hopkins University.

According to CNBC’s September Fed survey of economists, fund managers and strategists, respondents said there is a 52% chance that the US will enter a recession in the next 12 months.

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“The probability of a recession, I think it’s much higher than 50% — I think it’s about 80%. Maybe even higher than 80%,” Hanke told CNBC’s Street Signs Asia on Friday.

“If they continue with the quantitative tightening and move that growth rate and M2 (money supply) into negative territory, it’s going to be serious.”

They really looked in the wrong places for inflation and the causes of inflation. They look at everything under the sun except the money supply.
Steve Hanke

Professor of Applied Economics, Johns Hopkins University.

Hanke was, and has been, critical of the Federal Reserve’s failure to contain inflation by keeping an eye on the large supply of money sloshing around in the US economy.

“They’ve really looked in the wrong places for inflation and the causes of inflation. They’re looking at everything under the sun except the money supply,” Hanke said.

“And in fact, they’ve doubled and tripled on the argument that money is unrelated to economic activity or has no reliable relationship to economic activity and inflation.”

A customer shops at a grocery store in Oregon. There is an 80% chance that the US will enter a recession — much higher than previously predicted, according to Steve Hanke, a professor of applied economics at Johns Hopkins University.

Wang Ying | Xinhua Press Agency | Getty Images

He accused the US central bank of rising inflation.
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