Biden: "Even if a Recession Occurs, It Will Be Mild... No Intention to Meet Putin" (Summary)

IMF Recession Warning Emphasized as "Very Mild"
"Putin a Rational Actor... Will Not Use Nuclear Weapons"
Expressing Discontent Over Saudi Large-Scale Production Cuts... "Reviewing Relations"

[Image source=EPA Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] U.S. President Joe Biden expressed an optimistic outlook regarding recession concerns raised both inside and outside the United States, stating that there will be no recession, and even if one occurs, it will be very mild. He emphasized that the U.S. economic situation is much more stable compared to other regions and praised the achievements of his economic policies since taking office.

Regarding Russia's invasion of Ukraine, he described Russian President Vladimir Putin as a "rational actor" and expressed optimism that Putin would not lead to an extreme nuclear crisis through the use of nuclear weapons. This is interpreted as the administration emphasizing its proactive response and the effectiveness of its efforts on the key issues of recession concerns and the Ukraine crisis ahead of next month's U.S. midterm elections.

Biden: "U.S. Holds Political and Economic Advantage... No Recession Will Occur"

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On the 11th (local time), President Biden stated in an interview on CNN's "CNN Tonight with Jake Tapper" that when asked whether Americans should prepare for a recession, "I do not think a recession will occur. If it does, it will be a very slight recession."

He said, "(A recession) is possible, but I do not expect it to happen," adding, "Every six months, they (experts) forecast the next six months, but such an event (recession) has not happened yet." He emphasized, "We have done a lot to prevent a recession and are in a better political and economic position than any other major country in the world."

He continued, "Americans have reasons to worry about energy prices and other issues, but the government is actively responding, reducing drug prices through the Inflation Reduction Act (IRA), and expanding investments in the energy sector," praising his economic policies since taking office.

However, concerns are growing both inside and outside the U.S. that a severe recession will occur starting next year. The International Monetary Fund (IMF) warned in its World Economic Outlook report released that day that global recession concerns are expanding and inflation is accelerating.

On the same day, Pierre-Olivier Gourinchas, IMF Chief Economist, forecasted at a press conference following the World Economic Outlook report release on the 11th (local time) that the global inflation rate will rise from 4.7% last year to 8.8% this year. He also predicted that the high level of inflation could persist longer than expected.

In particular, the IMF recommended that central banks of each country maintain their tightening paths. Economist Gourinchas said, "It does not mean we should accelerate now, but it also does not mean we should stop the path of monetary normalization." He cited Europe's energy crisis and the impact of a strong dollar as future concerns, stating, "The fight against inflation may be more difficult than we currently expect."

"Putin Misjudged His Ability but Is a Rational Actor"

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President Biden unusually described President Putin as a rational figure and emphasized that he would not resort to nuclear use that could trigger an extreme nuclear war.

Biden said, "I think he greatly misjudged his own ability, but I consider him a 'rational actor.' Putin, right after deciding to start the war, said in a speech that he needed to be the leader of Russia who unites all Russian speakers. That was an irrational thought." He added, "Putin wrongly thought Ukrainians would succumb to Russia's invasion. His purpose was not rational. He seemed to think Ukrainians would welcome him with open arms."

President Biden further stated, "We will not negotiate with Russia about Ukraine in Ukraine's absence," drawing a line by saying he has no intention to meet with President Putin immediately. He emphasized, "Whether I meet with Putin depends on what he wants to talk about."

Although Biden pointed out Putin's misjudgment, calling him rational is interpreted as an expression of hope and expectation that Putin will not order extreme nuclear use. It is also seen as a subtle warning to Putin that nuclear use would lead to direct intervention by the U.S. and the West and could greatly escalate the Ukraine war into a nuclear conflict.

Earlier, on the 6th, President Biden expressed concern over Russia's nuclear threats using the strong term "Armageddon" (the final war of humanity described in the Bible). Although the White House later stated there were no actual signs of Russia's nuclear threats, fears of nuclear war spread widely, negatively impacting global economic and financial sector investment sentiment.

Expressing Dissatisfaction with Saudi Arabia: "Reevaluating Relations"

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However, President Biden directly expressed dissatisfaction with Saudi Arabia, which announced a large-scale oil production cut despite requests from the U.S. government. Biden said, "I think it is time to 'rethink' the relationship between the U.S. and Saudi Arabia," adding, "I am already in that process, and Congress also has work to do. There will be consequences for their assistance to Russia."

Before Biden's remarks, the White House had already directly expressed great disappointment with Saudi Arabia's production cut decision and warned of a review of relations. Earlier that day, John Kirby, White House National Security Council (NSC) Strategic Communications Coordinator, explained, "President Biden thinks we need to reassess our bilateral relationship with Saudi Arabia to see if it is necessary and beneficial to our national security. The president is disappointed with the production cut decision and wants to work with Congress on what form the relationship with Saudi Arabia should take going forward. Many lawmakers have expressed concerns, and the president will soon engage in talks (with Congress)."

According to The Wall Street Journal (WSJ), a few days before the OPEC+ production cut announcement, U.S. government officials urgently requested Saudi Arabia and representatives of major oil-producing countries to postpone the decision until the next meeting. However, they received a firm "No" from Saudi Arabia and others, and WSJ reported that the Biden administration and the U.S. Democratic Party are very angry about the decision.

This content was produced with the assistance of AI translation services.