President Biden and the Fed's 'tricky balancing act' to fight inflation and delay a recession 'just became so much more difficult' amid bank run contagion and a big budget.
"The point is that when you're structurally weak, which our economy is now because of the fiscal irresponsibility that we've been practicing for so long, anything can set off the problem," MacGuineas said. "And right now, we are already stuck in a very difficult situation between fighting inflation and avoiding recession. That tricky balancing act just became so much more difficult.
President Biden is stuck in a"tricky balancing act" between fighting inflation and delaying a recession, Committee for a Responsible Federal Budget president Maya MacGuineas said on"Mornings with Maria" Tuesday, March 14, 2023.last week on Capitol Hill that the central bank is prepared to raise rates higher than previously expected in the face of still-hot inflation. The Fed’s hawkish stance on rate hikes, MacGuineas argued, could further hurt Americans’ bottom lines.
"The more the Fed takes action to fight inflation, the more that can damage our overall budget situation. What the president came out with was a budget that really acknowledges there's almost no way to get on top of this problem, it's so large right now," the committee president said.President Joe Biden addressed the state of the U.S. banking system on Monday following the collapse of Silicon Valley Bank., which has been estimated to increase the national debt from $24.
Data from MacGuineas’ Committee for a Responsible Federal Budget released last week showed the budget sets a path towards, rising from 98% of GDP at the end of 2023 to 106% by 2027 and then 110% by 2033. "There will be massive across-the-board benefit cuts if we continue to delay action," she warned. "This is a budget that really doesn't acknowledge how severe our fiscal problems have become. So I hope we start by going in the direction of reducing the deficit like his budget has asked for, but I think we need to stop the spending, and we need to focus on the saving before we do anything else.
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