Inflation is eating into consumer spending power, and the Federal Reserve was “nowhere close” on being able to control inflation, former Fed Governor Lawrence Lindsey said.
Higher inflation will force consumers to limit their spending by so much that the economy will slump into a recession by the July-September quarter, former Federal Reserve Governor Lawrence Lindsey said on Monday.
“That’s going to push consumer purchasing power down by about 2 points on top of the 2.5 points it has already declined since the beginning of 2021. You can’t have that much of a shock without having a recession,” he said. The Labor Department estimates that earnings adjusted for inflation fell by 2.6% over the 12 months ending in February.
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