I was doing an interview for our annual What’s Next issue this morning when Fed Chair Ben Bernanke went to the Hill to talk about the economy. I’m just now catching up with what he had to say. Lots of good thinking on how crappiness in the credit markets and write-downs at big banks have increased “the downside risks to growth.” Here’s the punchline:
At present, my baseline outlook involves a period of sluggish growth, followed by a somewhat stronger pace of growth starting later this year as the effects of monetary and fiscal stimulus begin to be felt.
But he’s not ruling out more rate cuts:
Although the baseline outlook envisions an improving picture, it is important to recognize that downside risks to growth remain, including the possibilities that the housing market or the labor market may deteriorate to an extent beyond that currently anticipated, or that credit conditions may tighten substantially further. The FOMC will be carefully evaluating incoming information bearing on the economic outlook and will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks.
So, here’s my question for all of you: Is anyone out there hoping for a recession?
I’m ready. I say let’s do this thing and let’s do it now.
Recessions are not-nice times. People lose their jobs. They don’t get to buy a bunch of new stuff. I get that.
But I rent an apartment in Manhattan, and if there’s ever any chance of being able to buy one, we’re going to need a real hiccup in GDP. A lot more Wall Streeters are going to have to be fired.
In any economic situation there are winners and there are losers. Plenty of people profit during recession, and I hope to be one of them. A recession is going to happen eventually anyway — hence the business cycle — so why not sooner rather than later? I’m getting a little bored by all the will-she-or-won’t-she theater, anyway.