The economic outlook in the United States is unusually murky, with different sets of indicators telling different stories. But it is entirely possible that inflation will get stuck at a level inconsistent with the US Federal Reserve’s target, reducing – perhaps even to zero – the number of interest-rate cuts this year.
WASHINGTON, DC – Many economists and commentators have been popping champagne corks and toasting the US Federal Reserve for having steered the economy toward a soft landing.
There’s just one problem: the plane has not landed yet.
What would a soft landing look like? Inflation would remain at or adequately close to the Fed’s 2% target for a sustained period, while employment and economic output would increase at rates low enough not to put upward pressure on prices, but also high enough to avoid recession.
WASHINGTON, DC – Many economists and commentators have been popping champagne corks and toasting the US Federal Reserve for having steered the economy toward a soft landing.
There’s just one problem: the plane has not landed yet.
What would a soft landing look like? Inflation would remain at or adequately close to the Fed’s 2% target for a sustained period, while employment and economic output would increase at rates low enough not to put upward pressure on prices, but also high enough to avoid recession.