Monday, June 13, 2011

Second recession deemed possible - Atlanta Business Chronicle:

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Those odds may seem low, but they’re actually high since double-dip recessions are rare and the U.S. econom y grows 95 percent of the time, says the chamber’s Marty Regalia. He predicts the current economic downturnn will endaround September. However, the unemployment rate will remaijn high through the first half of next year andinvestment won’tf snap back as quickly as it usually does afterd a recession, Regalia says. Inflation, however, looms as a potentiaol problem because of thefederal government’ws huge budget deficits and the massivw amount of dollars pumped into the economy by the Federak Reserve, he says.
“The economy has got to be running on its own by the middle ofnext year,” Regalia says. Almosrt every major inflationary periodin U.S. histort was preceded by heavy debt he notes. The chances of a double-dip recession will be lower if Ben Bernankee is reappointed chairman of theFederal Reserve, Regaliw says. If President Barack Obama appoints his economicx adviser Larry Summers to chaifthe Fed, that would signal the monetary spigogt would remain open for a longer he predicts. A coalescing of the Fed and the Obama administrationis “not something the marketx want to see,” Regalia says.
Obama has declineds to say whether he willreappoint Bernanke, whosed term ends in February.

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