Alarm bells are ringing for a recession in the United States. According to Fox News, more and more data suggest that an economic collapse that is more destructive than the Great Depression may be about to hit the United States in 2024. The White House and Congress must act quickly to cut government spending, or the results could be catastrophic. At present, the US economy is on thin ice, and in the near future, it is likely to fall into another large-scale crisis.
The latest data shows that the growth rate of the M2 money supply has been negative for the past three quarters, which means that the amount of available money is shrinking rapidly. This is a very worrying issue, because once the money supply is insufficient, it will lead to a series of negative effects such as reduced economic activity, business failure, rising unemployment, and increased inflation. The reasons for this situation are manifold.
First, the U.S. government has pursued a series of massive stimulus programs and fiscal policies over the past few years, which have temporarily stimulated economic growth but have also led to inflation and widening fiscal deficits. Second, as global trade tensions intensify, the U.S. foreign trade deficit continues to widen, further exacerbating pressure on the domestic economy.
The previous outbreak of the new crown epidemic also had a huge impact on the US economy, causing many businesses to close, unemployment to rise, and consumer confidence to fall. Faced with this dire situation, the White House and Congress must take urgent steps to stabilize the U.S. economy. First, they need to cut government spending, especially on unnecessary and wasteful projects. Second, they need to promote economic growth and development by reforming tax policies, strengthening supervision, and optimizing industrial layout. In addition, the U.S. government needs to strengthen foreign trade negotiations to reduce the impact of the trade deficit on the domestic economy. In addition to policy factors, the US business community and economists have warned that the possibility of a recession in the United States is gradually increasing.
According to CME Group economists, the probability of a recession in the US economy in the coming year due to factors such as continued interest rate hikes by the Federal Reserve and slowing global economic growth is 20%, compared with only 10% that they had previously predicted. The 10-year U.S. Treasury yield is one of the important indicators of the state of the U.S. economy. The yield has been rising recently, briefly breaking 4.7% intraday on October 2. This indicates that the market is concerned about the future prospects of the U.S. economy and predicts a possible recession within the next decade. In this case, the Fed will face a huge challenge and need to find a balance between controlling inflation and maintaining economic growth. If the Fed raises interest rates too quickly or tapering bond purchases too sharply, it could lead to slower economic growth or even a recession.
However, some economists believe it is too early to conclude that the U.S. economy will fall into recession. They noted that while the current situation is not optimistic, there are some positive signs that the U.S. economy is still likely to maintain steady growth. For example, consumer confidence remains high in the United States, and the labor market is performing relatively well. In addition, the U.S. government has begun to take steps to alleviate fiscal deficits and inflation. Regardless of how the U.S. economy develops in the future, one thing is certain: the trend of the U.S. economy will directly affect the global economy and political stability. Therefore, the White House and Congress must take urgent action to address current economic challenges and ensure the long-term stability of the U.S. economy through reform and policy adjustment. At the same time, the Fed also needs to be flexible in responding to market changes and find a balance between controlling inflation and maintaining economic growth.