Economist Henrik Jebevk warns of a large-scale recession in the United States.

Source: BlockMedia Original Title: Economist Henrik Jæverk, warns of serious recession in the US economy Original Link: Henrik Jevberg, an economist at Swissblock, warned that the US economy is heading towards a serious recession and pointed out that the Federal Reserve( is not recognizing clear signals.

Jeverk stated, “We are heading towards a massive recession, and the Fed is completely oblivious to it despite using vast resources.” He identified the fundamental failure of economic interpretation, rather than a lack of economic data or experts, as the main issue with the Fed.

The Federal Reserve has been criticized for missing obvious and significant economic patterns despite having hundreds of highly trained economists. His argument is that complex data analysis approaches have obscured the fundamental nature of economic cycles.

The Reality of the Business Cycle

Jeberk emphasized that understanding the proper cycles and interactions of the economic cycle is essential for predicting a recession. He criticized that overlooking this could lead to incorrect conclusions, even with ample research and resources. He assessed that policymakers are unprepared for the upcoming recession due to these interpretive errors.

Despite the Fed having tremendous data and analytical tools, it appears to be failing to accurately grasp the changes in the upcoming economic cycle. This is interpreted to mean that the Fed's outlook underestimates the severity and timing of a recession.

Warning of Unemployment Rate and Economic Recession

He assessed that the rise in the unemployment rate in the United States is a sign of recession, calling it “a highly accurate indicator.” As of November, the U.S. unemployment rate reached 4.6%, the highest in four years, and approached the Sahm Rule) threshold. As a result, the possibility of a recession has increased to about 40%.

Jeberk pointed out that the weakening labor market, housing market, and consumer indicators foretell a serious economic contraction. He added that the short-term liquidity provision by the Federal Reserve is insufficient to offset these structural pressures.