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

• Biden doesn't think a US recession is inevitable, but he still sees bumps on the path to recovery.
• "This is going to be a haul. This is going to take some time," the president said Monday.

There's no guarantee the US will soon slide into another economic downturn, but that doesn't mean the path forward is an easy one, President Joe Biden said Monday.

The US economy finds itself in a pivotal moment. The country has largely rebounded from the coronavirus crash of 2020, yet skyrocketing prices threaten to undo that progress. Inflation is at its fastest rate since the early 1980s, and the Federal Reserve is raising interest rates at an aggressive pace to counter the problem.

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

Biden dismissed some of those concerns, saying at a press conference in Tokyo that he didn't think such a recession was inevitable. Still, the president forecast that the rest of the rebound would have its obstacles.

"We have problems that the rest of the world has, but less consequential than the rest of the world has because of our internal growth and strength," Biden said at a press conference in Tokyo. "This is going to be a haul. This is going to take some time."

The president also highlighted surging gas prices as both a dire problem and an opportunity for the US. 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, according to AAA data. Bringing prices back down to earth will take time, but it gives the US a chance to move away from environmentally harmful energy sources and toward sustainable options, Biden said.

"When it comes to the gas prices, we're going through an incredible transition that is taking place that, God willing, when it's over we'll be stronger, and the world will be stronger and less reliant on fossil fuels," the president said.

Completing the economic recovery might bring some 'pain'

The "haul" Biden described will come at a cost for 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. Rate hikes dampen inflation by weakening demand, as higher interest rates lead to higher borrowing costs.

That's already shown up in some pockets of the economy. Mortgage rates have soared at their fastest rate in modern history, climbing more than 2 percentage points in just four months. Interest payments on savings accounts have also gotten slightly larger. Over time, the Fed's fight against inflation will lead to pricier car loans, credit-card debt, and bank fees.

Balancing the rate-hike strategy with steady economic growth will be "challenging," Fed Chair Jerome Powell said on Tuesday. He has repeatedly praised the strength of the US labor market, saying its resilience means the economy can shoulder higher interest rates.

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

"There may be some pain associated with getting back to" 2% inflation, he said in a May 4 press conference, adding: "But, you know, the big pain over time is in not dealing with inflation and allowing it to become entrenched."