Introduction: The U.S. economy is facing serious challenges, and GDP growth in the fourth quarter is likely to decline sharply, and may even trigger a prolonged recession. Although the GDP growth rate for the third quarter was revised to 52%, beating expectations, but the Atlanta Fed** grew by just 1 percent in the fourth quarter2%, which is worrying. Against this backdrop, Yellen and Powell have engaged in a heated debate over the future fate of the US economy. This article will focus on this topic.
As mentioned in the original article, the US GDP growth rate for the third quarter was revised to 52%, beating expectations, which signals the strong momentum of the US economic growth. However, the Atlanta Fed downgraded its fourth-quarter growth rate to 12%, which caused concern in the market. Further calculations show that the quarter-on-quarter growth rate in the fourth quarter was only 0Around 3%, it indicates that the growth rate of the US economy may decline sharply. Not only that, but it is even possible to experience negative growth for several consecutive quarters, officially declaring that the US economy has entered a recession. Such violent economic fluctuations are unacceptable and pose a serious challenge to the ability of the United States to govern the economy.
Comparative analysis: In fact, the instability of the US economic performance has become the focus of global investors. The revised GDP growth rate for the third quarter, although high, was contingent and fluctuated significantly from previous data. In addition, Allianz's chief economist also pointed out that the rising fiscal deficit and the increase in the number of bankruptcies, coupled with the above-target inflation rate, have exacerbated the increased vulnerability of the US economy. This situation runs counter to the long-term sustainable development of the U.S. economy, bringing greater risks and uncertainties to it.
Although recent consumption data in the United States has been relatively good, the data shows that American savings have been declining, which means that Americans are rapidly depleting their savings. Future consumption will be unsustainable, which will weaken the support of US economic growth. In addition, a growing number of economists are beginning to pay attention to the negative impact of the US fiscal deficit on the economy. Critics in the past have argued that Yellen did not issue large amounts of Treasury bonds when interest rates were low, resulting in now having to issue Treasury bonds with high interest rates. However, Yellen believes that the rise in Treasury yields is mainly due to the Fed's interest rate hikes, and only a rate cut can lower Treasury yields. However, Powell said that a rate cut is not being considered in the near term, and that the Fed will raise interest rates further if needed. Differing views on the fate of the economy have brought economic decision-making to an impasse in the United States, which has also raised concerns about the United States internally.
Comparative analysis: Consumption is one of the important engines of economic growth, and the decline in US savings will cast a shadow on future consumption growth. Rising fiscal deficits and rising Treasury yields pose a threat to economic stability. The disagreement between Yellen and Powell has led to a difficult consensus in decision-making, further deepening the market's distrust of the United States' ability to govern.
Conclusion: The U.S. economy is facing serious challenges, and past growth is likely to be unsustainable. The comparison of the data shows that the GDP growth rate in the fourth quarter will fall sharply, and even raise the risk of a sustained recession. In addition, the lack of consumer support and the rising fiscal deficit have further weakened the stability of the US economy. Yellen and Powell's disagreement on economic policy has further heightened the market's doubts about the ability of the United States to govern. In the face of such a predicament, the United States needs to take practical measures to strengthen internal coordination and stabilize market confidence to ensure sustained and healthy economic development.