U.S. Federal Reserve President Neel Kashkari Issues Alert over Elevated Recession Threat, Cites Consumers and Businesses as Hesitant Due to Tariff Uncertainty
FED OFFICIAL WARNS OF RECESION RISK IN U.S. AMID ECONOMIC UNCERTAINTY
The President of the Federal Reserve Bank of Minneapolis, Neel Kashkari, has raised concerns about the increased risk of a recession in the U.S. due to ongoing economic uncertainties, particularly those related to tariffs and trade taxes.
In a recent interview with CNBC, Kashkari shared his concerns about the impact of these uncertainties on businesses and consumers, which are delaying significant investments and decisions due to a "wait-and-see" approach. He stated that businesses, in particular, are hesitant to commit resources until the policy environment becomes clearer.
The lack of clarity surrounding tariffs is negatively affecting business confidence, potentially leading to slower economic growth or even a recession. Kashkari's comments suggest that the current environment may amplify recession risks, especially if indecision continues or if policy choices are disruptive to trade and investment flows.
Furthermore, concerns about stagflation—an economic environment characterized by stagnant growth alongside persistent inflation—have been raised. If the Federal Reserve is faced with persistent inflation and a weakening economy, Kashkari argues that the central bank should prioritize the fight against inflation. According to him, the current high inflation, which has been sustained for four years, necessitates protection and defense of the inflation anchor of 2%.
Last week, fellow Fed President Austan Goolsbee, who leads the Chicago bank, issued a warning about President Donald Trump's policy choices potentially leading to an unfavorable economic environment known as stagflation.
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References
- [1] CNBC, May 28, 2025
- [2] Reuters, May 28, 2025
- [3] The Wall Street Journal, May 28, 2025
- [4] Bloomberg, May 28, 2025
- [5] NBC News, May 28, 2025
Despite the FED's warnings of recession risk in the U.S., the volatile environment has not deterred some from investing in cryptocurrencies and altcoins, as they are perceived as potential hedges against inflation and economic uncertainty. The ongoing uncertainties have prompted discussions about the role of blockchain technology and digital currencies in the broader financial and business landscape.
