Harvard Economist Rogoff: Odds of ‘Significant Recession’ Are ‘High’ if Fed Tries to Lower Inflation as Fast as It Says

On Friday’s broadcast of CNBC’s “Closing Bell,” Professor of Economics at Harvard University and former International Monetary Fund Chief Economist Ken Rogoff argued that achieving a “soft landing” where inflation comes down without a recession will be “very, very difficult” and that if the Federal Reserve “tries to bring inflation down as fast as they’re talking about, the odds of a recession, a significant recession, are high.”

Rogoff said, “I think we’re not in a recession now. Of course, the numbers are hard to read because there are certainly output numbers falling. The jobs report suggests that inflation’s not that bad, but there are other numbers that suggest it is. I think the question, to me, is how determined is the Fed to bring down inflation in the, say, next 18 months, how patient is it willing to be to let it stretch out longer. We’re also facing a lot of supply shocks in a way we have not seen in 50 years, and that’s just a lot harder take. I mean, yes, if you have a lot of luck. But the luck can go the other way. It can easily be that the Ukraine/Russia gets worse, that China — which is temporarily pulling out of its COVID lockdown — goes back into it, that other things go wrong. I think it’s going to be very, very difficult to have a soft landing. So, I think if the Fed tries to bring inflation down as fast as they’re talking about, the odds of a recession, a significant recession, are high.”

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