Biden Thinks There Won’t Be a Recession -- or Worst Case, a Slight One

It's a bit of reassuring news at a time when so many people have been sounding warning bells.

Will a recession hit in 2023, and if so, just how bad will things get? That's the question on many people's minds as we keep reading warnings that economic conditions could take a turn for the much worse.

But if you ask President Biden, he's not that worried about a recession. In a recent CNN interview, Biden was quoted as saying "I don’t think there will be a recession. If it is, it will be a very slight recession."

On the one hand, that's good news. But whether Biden's projections are accurate is another story.

Recession fears are looming

While it's a good thing, at least in theory, that the president has such an optimistic view of the economy, the reality is that many financial experts disagree with regard to recession predictions. Recently, JPMorgan Chase CEO Jamie Dimon said to expect the U.S. economy to enter a recession within the next six to nine months. And last month, 72% of economists surveyed by the National Association for Business Economics said they expect a recession by mid-2023, if not sooner.

A big reason so many experts are concerned about an impending recession is that the Federal Reserve has been aggressively racking up interest rates in an effort to slow the pace of inflation. In doing so, it could fuel a major pullback in consumer spending -- one drastic enough to spur an economic downturn.

Of course, the Fed is hoping its rate hikes will produce more of a moderate pullback in consumer spending. But that's not guaranteed to happen, and so a recession is something consumers would be wise to prepare for.

How to get ready for a recession

Whether a recession hits in early 2023, mid-2023, or later, one thing it's important to realize is that recessions are somewhat predictable. We can't always determine when they'll hit, but the economic cycle is such that they're bound to occur at some point. And so it's always a good idea to be prepared.

Right now, perhaps the best way to do so is by shoring up your emergency savings. Everyone, regardless of income level, should aim to have enough cash in a savings account to cover a minimum of three months of essential living expenses. And in the wake of the COVID-19 pandemic, some financial experts are saying it's best to have enough cash on hand to cover up to a year's worth of bills.

It's also a good idea to dump needless expenses ahead of a recession. Doing so can free up cash and also make it easier to adjust to living on less should that need arise.

Finally, now in particular is a good time to shed costly debt, like that of the credit card variety. Debt payments can be a huge burden during a recession, and in light of the Fed's interest rate policies, credit card debt could grow increasingly expensive if it's carried into 2023.

All told, it's hard to say whether Biden's economic predictions are accurate or not. But the best bet either way is to prepare for a recession -- even if the economy is spared in 2023.