Biden says a recession isn't a given — but the rest of the recovery is going to be a 'haul'

President Joe Biden said Monday that there is no guarantee that the US will slide into another economic downturn.

The US economy is in a crucial moment. The country has largely rebounded from the coronaviruses crash of 2020, but skyrocketing prices are threatening that progress. The Federal Reserve is raising interest rates at an aggressive pace to counter the problem of inflation, which is at its fastest rate since the early 1980s.

Fears of a recession in 2023 have been raised by those rate increases. Worried economists see little hope for a soft landing in which the Fed can cool inflation without leading the economy to shrink.

Biden said at a press conference in Tokyo that he didn't think a recession was inevitable. The president predicted that the rest of the rebound would have obstacles.

Biden said at a press conference in Tokyo that the problems the rest of the world has are less consequential than the ones the US has. This is going to take some time.

Gas prices are a dire problem and an opportunity for the US according to the president. The average price per gallon of gasoline in the country hit a record $4.59 on Monday, and all 50 states now have average prices above $4 a gallon. Biden said that bringing prices back down to earth will take time, but it will give the US a chance to move away from harmful energy sources.

When it comes to the gas prices, we are going through an incredible transition that is taking place that will make the world stronger and less dependent on fossil fuels.

Completing the economic recovery might bring some 'pain'

The Biden described will cost many Americans. The Fed has signaled that it will raise interest rates at a faster-than-usual clip through 2022, as it looks to pull inflation to healthier levels. Higher interest rates lead to higher borrowing costs and weaken inflation.

Some pockets of the economy have seen that. Mortgage rates have risen more than 2 percentage points in just four months. Interest payments on savings accounts have gone up. The Fed's fight against inflation will lead to higher car loans, credit-card debt, and bank fees.

The Fed Chair said on Tuesday that it will be challenging to balance the rate-hike strategy with economic growth. He says the US labor market's resilience means the economy can shoulder higher interest rates.

Powell said this month that the trade-off is worth it in the long run, because the Fed's push for tighter monetary policy will hurt affordability in some areas.

He said in a May 4 press conference that there may be some pain associated with getting back to 2% inflation.