The David Frum Show On the Brink of Global Recession
54 snips
Apr 22, 2026 
Adam Posen, economist and president of the Peterson Institute, explains global economic fallout from the Iran war, Trump-era tariffs, and risks of renewed inflation and regional recessions. He covers Fed politics and stagflation danger. They also discuss energy shocks, deglobalization, and how U.S. policy choices could reshape alliances and investment incentives.
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Pressuring The Fed Risks Recreating 1970s Stagflation
- Political pressure to force Fed rate cuts risks creating inflation expectations and stagflation if the Fed capitulates.
- Posen notes most Fed officials resist cuts now; failure to act appropriately could repeat Arthur Burns–era errors.
Rate Hikes To Fight Oil Inflation Could Trigger Recession
- Large Fed rate hikes to tame oil-driven inflation (50–75 bps) could trigger a US recession.
- Posen adds AI investment borrowing makes big tech more sensitive to rate rises than before.
Tariff Uncertainty Froze Non-AI Business Investment
- Trump's tariff, migration and trade unpredictability froze non-AI business investment after April of last year.
- Posen links policy uncertainty to a multi-quarter investment flatline despite tax cuts and deregulation incentives.
