Federal Reserve walking 'very fine line' as recession threatens US economy, former fed official says
Former Kansas City Federal Reserve Bank President and CEO Thomas Hoenig discusses potential for a recession during his appearance on 'Mornings with Maria.'
Despite inflation cooling in October, one expert is not ignoring the signs of a potential recession on the horizon.
«I think there is still a good risk of a recession and so does the Fed. And they’re walking this very fine line,» former Kansas City Federal Reserve Bank President and CEO Thomas Hoenig said during an appearance on «Mornings with Maria» Wednesday.
«I think we underestimated the extent of the fiscal stimulus that went on, not just the pandemic immediately, but the CHIPS Act, [and] the Infrastructure Act,» Hoenig explained when asked about the delayed effects of the Fed’s 11 rate hikes.
"Thesethings are all stimulating the economy that has given us a very strong third quarter, for example… And I think that's a big issue for the delay," he continued.
The former Kansas City Fed Bank president highlighted the banking industry’s fragility as concerns regarding the Fed’s rate hikes continue to be vocalized.
Former Kansas City Federal Reserve Bank President and CEO Thomas Hoenig discusses the Fed's handling of inflation. (Drago/Bloomberg via Getty Images/Michael Brochstein/SOPA Images/LightRocket via Getty Images/ / Fox News)
"I think people underestimate how fragile the banking industry is," Hoenig stressed.
INFLATION RISES 3.2% IN OCTOBER, LESS THAN EXPECTED
«While you're going to see some of these rate cuts, including a slowing economy, which is very likely to avoid a recession, the fact that the banking industry still is fragile and if they get the rates down, that will help the banking industry,» Hoenig expressed.
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