It’s hard to avoid the doom and gloom about where the U.S. economy is headed. High-profile business leaders and top economists have been warning for months about a looming recession, with many criticizing the Fed for keeping interest rates too high in its effort to tame inflation.
But Heather Boushey, a member of the White House council of economic advisers, believes there’s reason for optimism, thanks in part to a series of laws passed by Congress and signed by President Joe Biden during his first two years in office. “We remain optimistic that we will be able to see the soft landing that we are looking for,” she said in a Financial Times interview published Wednesday. “Time will tell but I think the pieces are in place to have a fighting chance to do so.”
Boushey pointed to the $430 billion Inflation Reduction Act, the $1.2 trillion Bipartisan Infrastructure Law, and the $52 billion Chips and Science Act as three major pieces of legislation that will be huge in staving off a downturn.
“We are seeing private sector investments on top of public sector investments in the real economy and in the industrial base of the United States, which we know have strong multiplier effects,” she said.
She also noted the progress made against inflation, even as it remains too high for the Fed’s comfort.
The Consumer Price Index, she noted, is “down two full points from where it was last summer,” Boushey said. “That’s a marked achievement. We had a plan, the president executed on that plan, and you can see the benefits for the American people.”
Of course, the Biden administration will find it harder to pursue its agenda over the next two years, with Republicans set to control the House of Representatives. But Boushey sees reason for optimism, even as others dread the political gridlock.
“Divided government is always a challenge, but one of the things that President Biden has demonstrated is that he is willing to work with anyone — Democrat, Republican, independent — to get things done.”
Boushey isn’t the only member of Biden’s circle to defy the prevalent economic pessimism.
Brian Deese, top economic adviser to the president, said in October that the U.S. economy has enough “strength and resilience” to shield it from a recession.
“If we look at where the United States are, two things are clear,” he told the Financial Times. “One is that we have a degree of strength and resilience in the labor market and household balance sheets and in business investment. That is continuing to move our economy forward, and that’s really important. The second is that we are in a stronger position than…frankly, any other country to navigate through this transition without having to give up those gains.”
Fortune reached out to the White House for comment but did not receive and immediate reply.
Such optimism stands in marked contrast to the sentiments of most business leaders. A full 98% of CEOs said they expect a recession in the next 12 to 18 months, according to a Measure of CEO Confidence survey recently released by the Conference Board.
Tesla CEO Elon Musk warned this week, “We’re overdue for a recession,” predicting one will start in 2023 and last until the second quarter of 2024.
Amazon founder Jeff Bezos recently sounded the alarm on the economy, warning people to “batten down the hatches” amid stubbornly high inflation and continuing stock market volatility.
Not every business thinker is fearful of what’s ahead, though.
Jim Paulsen, chief investment strategist at The Leuthold Group, predicted this month that stocks will rise 25% and the S&P 500 will hit 5,000 in the coming year.
“There is too much pessimism,” he said. “I don’t ever remember a time when the CEOs in this country are almost 100% universal that we are going to have a recession. Usually, recessions are something that comes out of left field and surprises the market. That’s not going to happen here.”
“The lows are in, and I think we are starting a new bull market,” he added.
