On Monday’s broadcast of CNBC’s “Closing Bell,” Professor of the Practice of Economic Policy at Harvard University and the Harvard Kennedy School Jason Furman, who served as Chairman of the Council of Economic Advisers under President Barack Obama and on the Council of Economic Advisers and the National Economic Council under President Bill Clinton, argued that the most likely economic scenario is a mild recession that doesn’t solve inflation, “and we need to have another go at the whole thing.” Furman also said that continuous “uncomfortably high” inflation is more likely than a recession that solves inflation or avoiding a recession while solving inflation, something he thinks has “at best, about a 10% chance” of happening.
Furman said, “I think there [are] four possibilities here: There’s a soft landing, I think, at best, about a 10% chance of that, really hard to bring this magnitude of inflation down without a recession. There’s the hard landing that solves it. But, yeah…I think there [are] two scenarios that are even more likely than either of those. One is continued overheating, the unemployment rate stays below 4.5, the inflation rate stays uncomfortably high. I think, unfortunately, the most likely scenario is we have a mild recession, it brings inflation down, but it brings it down to something like 3.5%. And so, it does not solve our problem and we need to have another go at the whole thing.”
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