By Greg Robb
November 5, 2019
There is a risk that U.S. businesses could convince themselves that bad times are around the corner and actually cause a downturn, said Richmond Federal Reserve President Thomas Barkin on Tuesday.
Right now, firms are frustrated with political polarization and there is a high degree of uncertainty about the outlook for government policies, Barkin said in a speech to the Greater Baltimore Committee Economic Outlook Conference.
Businesses say they’re not scaling back yet but are reluctant to “double down,” he said.
“For these reasons, I don’t discount the idea that we could talk ourselves into a recession — particularly if the uncertainty begins to affect consumer confidence and spending,” he said.
Barkin said he didn’t think a recession was imminent. “There’s no evidence that we’re faltering.”
“In other words, as long as consumers keep spending, we will be in a good place,” he said.
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