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Data released on Thursday is expected to show that the U.S. economy grew little or perhaps shrank in the second quarter of 2022.
The Federal Reserve is expected to raise interest rates by three-quarters of a percentage point on Wednesday as it tries to slow the economy and tame rapid inflation. While the Fed is aiming for a “soft landing” — in which it cools the economy just enough without tipping it into a recession — policymakers have acknowledged that pulling that off will be a challenge.
The darkening economic prospects in the United States and abroad pose trouble for President Biden and his Democratic Party ahead of midterm elections that will determine who controls Congress.
On Monday, Mr. Biden made the case that the United States was not in a recession and that its economy remained strong.
Understand Inflation and How It Impacts You
“We’re not going to be in a recession, in my view,” he said, pointing to the low jobless rate and expressing hope that growth will stay steady even as it slows. “God willing, I don’t think we’re going to see a recession.”
The I.MF. noted that growth in the United States had been weaker than expected in the first half of the year and that there was “significantly less momentum” in private consumption because of inflation and the expectation of higher borrowing costs.
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