Assessing the Current Risks to the U.S. Economy

Before Russia’s Feb. 24 invasion of Ukraine, the outlook for the U.S. economy was stressed but hopeful. Pandemic pressures appeared to be peaking, inflation was widely expected to normalize, and the Fed stood a credible chance of engineering a “soft landing.” But an enormous humanitarian atrocity in Europe has triggered an unpredictable global financial and economic conflict that will see consequences ricochet. Though new risks have emerged, and uncertainty is higher, at present the main impact of the crisis on the U.S. economy is the exacerbation of existing pressures and risks. The path of inflation, and the policies to contain it, remain the main threat to the cycle. While that risk has gone up, it need not be a recessionary outcome. As we wrote here last year, policy makers placed an enormous bet at the start of 2021 that extraordinary stimulus would transform a strong recovery into an even stronger expansion. The payoff would be a “tight” economy — one that delivered broad-based real wage gains that firms paid for with higher productivity growth, not by raising prices. A win-win-win for workers, firms, and politicians.

Full story : Assessing the Current Risks to the U.S. Economy.

OODA Analyst

OODA Analyst

OODA is comprised of a unique team of international experts capable of providing advanced intelligence and analysis, strategy and planning support, risk and threat management, training, decision support, crisis response, and security services to global corporations and governments.