Respected economist and University of Pennsylvania professor 76-year-old Jeremy Siegel said the U.S. is already in recession, having contracted 1.6% in Q1 and an expected 2.6% in Q2 when the official number comes out Aug. 1. Siegel worries now that 69-year-old Federal Reserve Board Chairman Jerome Powell is going overboard with Federal Funds rate hikes, the next one expected July 27. As of right now, Powell has threatened another 75-basis-point raise to bring the Federal Funds rate to 3.75%. While Wall Street rallied today on the expected rate hike, Siegel worries that the Fed has over-corrected for what looked like a mild recession based on an inflation rate of 8.6%. Siegel thinks the inflation rate has already come down with the recent rate hikes going from zero percent to three percent June 17. Siegel sees another contraction in Q2 growth, as much as 2.6%.
Fed Chairman Powell noted that the Fed can only do so much to fight inflation when geopolitical factors, like the Ukraine War, have created a much more challenging environment for the U.S. economy. President Joe Biden, 79, has committed the U.S., while he’s president, to a dangerous course of action by funding the bankrupt Ukraine government and funding a proxy war against the Russian Federation. There’s nothing Powell can do to stop Biden from spending over $54 billion on Ukraine, with the numbers climbing everyday. When it comes to what’s fueling today’s inflation, Biden boycotted Russian oil, hoping to break the Russian Federation for its Feb. 24 decision to invade Ukraine. But instead of slapping 69-year-old Russian President Vladimir Putin with crippling economic sanctions, Putin found a way out.
Putin said today that if the West wants to take down the Russian Federation on the battlefield they should continue to try. Biden turned the Ukraine War into a contest between the U.S. and Russian Federation now played out on the Ukrainian battlefield. Biden has watched Ukraine decimated by Putin’s forces but continues to challenge him on the battlefield. Instead of letting Ukraine’s 45-year-old neophyte President Volodymyr Zelensky prosecute a proxy war against the Russian Federation, Biden could have asked Zelensky to resolve his differences at the peace table. Biden admitted publicly March 26 in Warsaw, Poland, that he thought Putin could no longer remain Russian leader. Once the battle became about the U.S. and the Kremlin, Putin got serious about seizing more strategic Ukrainian land. Today, the Russian Federation controls over 25% of Ukraine’s sovereign territory.
So when it comes to today’s inflation that’s led to Powell taking extreme measures to hike interest rates, it’s all about Biden’s Ukraine War and boycott of Russian oil. Biden knows that the BRICS economic bloc, including Brazil, Russia, India, China and South Africa, all part of the G20, which starts a meeting July 8 in Bali, Indonesia. Secretary of State Tony Blinken, 59, plans to attend the meetings this weekend but continues to beat the dead horse that all nations must condemn Putin. Biden has consensus with the Western Alliance but nowhere else. Blinken will hear that the BRICS bloc wants no part of U.S. sanctions, believing, that no country, including the U.S., should take sides in the conflict between Ukraine and Moscow. Biden not only has taken sides, he’s funding the bankrupt Ukraine government and the proxy war against the Russian Federation.
Powell has no control of bad foreign policy decisions that have fueled the worst inflation in 40 years. “We are really in a recession. There’s no question,” Siegel told MSNBC. Siegel has concerns that the Fed could make the U.S. economy even sicker by strangling the money supply buy raising key rates unnecessarily. Cleveland’s Federal Reserve Bank Chaiman Loretta Mester said the Fed was looking at a 75-basis-point rise in the Federal Funds rate at the end of July. Siegel would like the Fed to reconsider the need of a 75-basis-point rise when prior rates hikes have already pushed the economy into recession. Siegel believes that commodity and housing prices have already peaked, starting to head down, judging by a precipitous drop in gold prices and droop in new and existing home sales due to mortgage rates increases. Siegel thinks the Fed should reconsider its expected rates hikes.
Economists like Siegal or Fed Chairman Jerome Powell can only sit from the sidelines and watch bad decision-making at the White House tank the U.S. economy. Powell can do nothing to stop Biden’s destructive Ukraine War, where the war morphed from a border dispute between Ukraine and Russia to a U.S. proxy war against the Russia Federation. Putin said today that if Biden and West wishes to take on the Russian Federation the battlefield, then let them try. Biden’s proxy war has created worldwide oil shortages in the West, skyrocketing prices and driven the worst inflation in over 40 years. Economists like Siegel or Powell can only sit back and watch the carnage to the U.S. economy, now in recession. If the war goes on much longer, it’s only going to destabilize an already shaky world economy, leading to recession in the European Union [EU] and other parts around the globe. Biden’s fight with Putin has already cost the U.S. economy trillions in wealth.
