“unlikely” 10 days ago, “certainly possible” today, the worrying change in tone of the United States

On April 28, US President Joe Biden showed his serenity about the economic situation in his country. ” I’m not worried “ of a risk of recession, he boasted to the press. A facade of optimism that her Secretary of State for the Treasury Janet Yellen resumed on May 18 in front of the journalists of the New York Times to whom she confessed “don’t expect a risk of recession”unlike a Europe “more vulnerable” according to her.

A month later, the tone began to change. The American president was more moderate. In the meantime, the Fed had begun to tighten its monetary policy by raising its key rates to tame inflation at its highest in 40 years. If he declared that a recession in the United States could be avoided, Joe Biden then recognized the serious economic difficulties of the Americans in a context of galloping inflation.

Admission of humility by Jerome Powell

Soon after, on June 9, the Biden administration began to point a “a risk of recession”, as Janet Yellen mentioned to journalists from the New York Times. However, the former president of the Fed “didn’t think” whether a recession is ” likely “.

Ten days later, on Sunday June 19, the words of Janet Yellen were no longer the same, since she said that she did not believe that a recession was ” inevitable “but finally conceded to expect “for the economy to slow down” to move towards “slow and stable growth”.

An even more negative outlook therefore for those who know how to read between the lines the polite discourse of economic decision-makers, deliberately sober so as not to alarm the financial markets sensitive to the slightest elements of communication.

However, she added two days later, on June 21, the recession is “Obviously a concern, but the backbone of our economy remains solid.” And yet, the next day, Jerome Powell finds it difficult to hide his pessimism. This Wednesday, during a hearing in Congress, the chairman of the Fed warned that a rapid rise in interest rates could cause a recession even if it is not the desired effect.

It is certainly a possibility (…) And frankly, the events of the last few months in the world make it more difficult for us to achieve what we want to do, to return to inflation of 2% while maintaining a solid labor market »he launched, specifying to expect “other surprises”.

Statements that made the markets cough. In Europe, Paris lost 0.81%, London 0.88%, Frankfurt 1.11% and Milan 1.36%. On Wall Street, the Dow Jones fell 0.15%, the Nasdaq index, influenced by technology stocks, lost 0.15%, and the broader S&P 500 index, 0.13%.