Fed Chair Powell: ‘I do not think the U.S. is currently in a recession’

Federal Reserve Chairman Jerome Powell said Wednesday that the U.S. economy is performing “too well” to be in a recession. 

“I do not think the U.S. is currently in a recession. And the reason is, there are just too many areas of the economy that are performing, you know, too well,” Powell said Wednesday on CNBC.

“It’s true that growth is slowing, for reasons that we understand,” Powell said. But he said that the labor market is “very strong,” even as the U.S. recovers from the COVID-19 pandemic. 

Powell’s comments echo those of Treasury Secretary Janet Yellen, who said on Sunday that the current state of the economy isn’t showing “any of the signs” of recession.

Growing consumer spending, industrial output, credit quality and other economic indicators don’t suggest the economy is in a recession, Yellen said, although she acknowledged that “way too high” inflation is straining the system.

Sen. Elizabeth Warren (D-Mass.) hit at Powell in a Wall Street Journal op-ed Sunday, saying the Fed’s effort to control inflation by hiking interest rates is “triggering a devastating recession” and jeopardizing the country’s “surprisingly strong” post-pandemic economic recovery. 

After U.S. inflation hit a 40-year high in June, the Fed announced Wednesday the second 75 basis point increase for interest rates in the last two months.