Biden signals US can avert recession but Americans are 'really down'

Concerns over inflation and an aggressive response by the Fed have fanned fears of recession and soured Americans' opinions of the economy and the President.

VIRGINIA (BLOOMBERG) - President Joe Biden said a US recession was not inevitable, but acknowledged that Americans were "really down" on the state of the country in an interview on Thursday (June 17) with the Associated Press.

"People are really, really down," Mr Biden said. "The need for mental health in America, it has skyrocketed, because people have seen everything upset - everything they have counted on upset.

But most of it is the consequence of what has happened, what happened as a consequence of the Covid-19 crisis."

The interview was Mr Biden's first with a print outlet since taking office, and comes a day after the Federal Reserve executed its biggest interest rate hike in almost three decades in a bid to tamp down ballooning prices.

Concerns over inflation and an aggressive response by the central bank have fanned fears of recession and soured Americans' opinions of the economy and the President - despite a strong labour market.

Mr Biden reiterated his message that the United States was "in a stronger position than any nation in the world to overcome this inflation".

"I am confident we are better-positioned than any country in the world to own the second quarter of the 21st century," Mr Biden said.

"That is not hyperbole, that is a fact."

Investors are among those concerned about the outlook, with the S&P 500 stock index this week tumbling into a bear market. Also this week, average mortgage rates climbed close to 6 per cent, the highest since 2008 and almost double where they were at the start of the year.

The White House has intensified its economic messaging efforts in recent days, with administration officials appearing more frequently on television and the President holding a series of events on White House efforts to combat inflation.

Mr Biden has placed particular emphasis on tackling high petrol prices - which now average more than US$5 (S$7) per gallon nationwide - issuing a letter critical of oil refiners earlier this week and announcing plans to visit Saudi Arabia next month.

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