Uncertain US economic outlook jars markets amid Ukraine war, Fed rate hike

The outlook for the US economy is unusually cloudy as war rages in Ukraine, commodity prices surge and the Federal Reserve embarks on a tricky campaign to tame inflation with higher interest rates.

Panelists said during a World Economic Forum panel Monday in Davos that the uncertainty is rattling financial markets and complicating investment decisions for businesses.

Adena Friedman, president of the NASDAQ stock exchange company, says a selling decision is much easier than a buying decision" for investors who can't see where things are headed.

Friedman said the U.S. Federal Reserve faces a difficult job raising rates enough to tame the highest inflation in four decades without tipping the economy into a recession.

Harvard University's Jason Furman, top economic adviser in the Obama White House, sounded cautiously optimistic that the United States could escape recession over the next year. That is partly because the job market has been strong and households still have plenty of savings even though Americans complain bitterly about surging inflation.

He says most people have jobs but what matters to them is that they're getting a once-in-a-generation pay cut'' because wage hikes are falling behind rising prices.