Reich Slams Tax Cuts, Palihapitiya Sounds Debt Alarm: This Week's Top Economic Stories

This week in the economic sector, we saw a mix of optimism and caution from analysts, investors, and economists. From concerns about a potential recession to warnings about corporate America’s debt wall, the week was filled with insightful analyses and predictions.

No-Show Recession: Despite the Leading Economic Index (LEI) declining for 14 months, Yardeni Research suggests that there’s little evidence the U.S. is headed toward a recession. The firm believes we’ve been in a rolling recession, making an economy-wide recession less likely. Read the full article here.

Corporate America’s Debt Wall: Billionaire venture capitalist Chamath Palihapitiya has expressed concerns about corporate America’s massive debt wall problem. He believes interest rates are going to stay higher for longer, and many companies that took out loads of short-term debt during the pandemic will face issues with refinancing. Read the full article here.

Republicans and Tax Cuts: Former U.S. labor secretary Robert Reich criticized Republicans for their strategy of reducing taxes on the wealthy while cutting social security benefits. He described it as socialism for the rich and cold, hard capitalism for everyone else. Read the full article here.

Jerome Powell on Bank Capital Requirements: Federal Reserve Chairman Jerome Powell hinted at a potential 20% rise in bank capital requirements from present levels, with a special focus on globally systemic banks and those with more than $100 billion in assets. He also suggested that interest rates may be raised twice this year if the economy continues to perform as projected. Read the full article here.

Paul Krugman on U.S. Economic News: Nobel laureate and economist Paul Krugman noted that U.S. economic news has been increasingly encouraging. He also took a dig at truthers who believe data may not be accurate, highlighting that private inflation numbers have matched the figures released by the Bureau of Labor Statistics. Read the full article here.

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