(PresidentialInsider.com)- MSNBC Economic Analyst Steve Rattner, who previously served as President Barack Obama’s Treasury Counselor, recently appeared on MSNBC’S “Morning Joe” to warn that there is a “substantial risk” of the United States economy entering a period of “stagflation.”
The warning from the former Obama administration officials reveals the deep problems with the economy under President Joe Biden’s leadership.
Speaking to Joe Scarborough, Rattner said that it is “very hard to reduce inflation without reducing economic growth,” warning that the U.S. is likely to experience more economic woes over the next few years.
Scarborough noted how the Federal Reserve recently increased interest rates in the hope of reducing inflation and asked whether Rattner agreed with Larry Summers – former U.S. Secretary of the Treasury – about the very real possibility of stagflation.
“There’s a substantial risk of that. It’s very hard to reduce inflation without reducing economic growth. And you can see that pretty clearly in the Fed’s own projections for what it thinks is going to happen in the economy…the Fed, which was insisting that inflation was going to be transitory and was going to kind of disappear, is now acknowledging it’s a more serious problem,” Rattner said.
So, what does it mean?
Well, according to Ratner, there will be substantially higher interest rates by the end of 2022. He also warned that GDP growth will slow to 2.8% from the expected 4%.
Stagflation means that economic growth slows down and unemployment remains high, while prices continue to go up.
Just how bad can things get over the next three years of Joe Biden’s leadership?