Jun 12, 2022 - Economy & Business

Bernanke says the Fed can avoid a big recession

Former Federal Reserve Board Chairman Ben Bernanke answers questions at a conference with former at the Brookings Institution September 12, 2018 in Washington, DC.

Former Federal Reserve Board Chair Ben Bernanke. Photo: Win McNamee/Getty Images

The Federal Reserve has "a decent chance" of helping the U.S. swerve a full-on recession, former Fed chair Ben Bernanke told CNN on Sunday.

Why it matters: The Fed will likely have to take more aggressive steps to cool demand broadly in the economy to tackle worsening inflation, which amplifies the risk of a sharp economic downturn, per Axios' Neil Irwin and Courtenay Brown.

What he's saying: "The U.S. economy today is a mixed bag," Bernanke said on CNN's "Fareed Zakaria GPS."

  • "A recession is possible. Economists are very bad at predicting recessions, but I think the Fed has a decent chance, a reasonable chance of achieving what [Fed chair Jerome] Powell calls a 'soft-ish landing,' either no recession or a very mild recession to bring inflation down," he added.
  • Bernanke noted that the U.S. has a strong labor market, indicating that "with some luck, and if the supply side improves, the Fed can get inflation down without imposing the kind of costs we saw in the early '80s."

Our thought bubble, via Axios' Felix Salmon: Economists on both sides — the ones who think we're headed for recession, and those who don't — broadly agree that the Fed is doing its best to prevent that outcome.

Go deeper: The disutility of economic forecasts

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