The Federal Reserve faces new questions as the U.S. economy continues to perform well despite high interest rates, prompting economists to believe a "soft landing" is possible, with optimism rising for an acceleration of growth and a more sustainable post-pandemic economy.
Fannie Mae economists predict that the U.S. housing market will remain unchanged regardless of whether the economy experiences a soft landing or enters a mild recession, with high mortgage interest rates and housing affordability issues continuing to impact the market. They anticipate that existing home sales will remain subdued, and while a recession may lead to a pullback in construction, a soft landing accompanied by higher mortgage rates could also result in slower housing construction and sales.
The economy is experiencing a soft landing, but the long-term consequences of easy money policies are still uncertain, with bankruptcies and a potential shakeout in office real estate looming.
Morgan Stanley's top economist, Seth Carpenter, believes that the US is nearing a dream economic scenario with falling inflation and steady growth, suggesting that the Federal Reserve is close to achieving a soft landing.
The U.S. economy may achieve a soft landing, as strong labor market, cooling inflation, and consumer savings support economic health and mitigate the risk of a recession, despite the rise in interest rates.
The US economy may face disruption as debts are refinanced at higher interest rates, which could put pressure on both financial institutions and the government, according to Federal Reserve Bank of Atlanta President Raphael Bostic.
The U.S. economy is heading towards a soft landing, but the actions of Saudi Arabia and Russia may disrupt this trajectory.
Goldman Sachs has lowered its odds of a US recession in the next 12 months to 15% from 20%, citing the resilience of the economy, supportive income growth, and a balanced labor market, with Chief Economist Jan Hatzius suggesting a soft landing is possible and that further rate hikes by the Federal Reserve are unlikely.
Despite recent optimism around the U.S. economy, Deutsche Bank analysts believe that a recession is more likely than a "soft landing" as the Federal Reserve tightens monetary conditions to curb inflation.
Australia's economy may not experience a soft landing, according to Treasurer Jim Chalmers, due to potential risks such as China's slowing economy and a slump in household consumption resulting from rising interest rates.
Bank of America warns that the US economy still faces the risk of a "hard landing" due to rising oil prices, a strong dollar, and potential interest rate hikes by the Federal Reserve, contrasting with the optimistic outlook of other Wall Street banks.
The odds of a recession in the US have collapsed, making markets vulnerable to any signs of the economy overheating and contributing to inflationary pressures.
Treasury Secretary Janet Yellen and Goldman Sachs may be optimistic about a "soft landing" scenario for the US economy, but the author remains skeptical due to factors such as a deeply inverted yield curve, declining Leading Economic Indicators, challenges faced by the consumer, global growth concerns, and the lagging impact of the Fed's monetary policy, leading them to maintain a conservative portfolio allocation.
Despite economists' hopes for a "soft landing" of the economy, signs such as inflation and uncertain variables make it difficult to determine whether the U.S. economy has achieved this outcome.
Potential risks including an autoworkers strike, a possible government shutdown, and the resumption of student loan repayments are posing challenges to the Federal Reserve's goal of controlling inflation without causing a recession. These disruptions could dampen consumer spending, lead to higher car prices, and negatively impact business and consumer confidence, potentially pushing the economy off course.
The article discusses the current state of the economy and questions whether the "soft landing" explanation and belief in a full recovery are accurate, particularly in light of China's economic struggles and global inflation concerns.
Investors are more focused on the release of new forecasts from the Federal Reserve, which will reveal their views on the prospect of an economic "soft landing" and the rate environment that will accompany it.
The Federal Reserve has paused raising interest rates and projects that the US will not experience a recession until at least 2027, citing improvement in the economy and a "very smooth landing," though there are still potential risks such as surging oil prices, an auto worker strike, and the threat of a government shutdown.
Despite threats such as a government shutdown, the UAW strike, rising gas prices, and the resumption of student loan repayments, economists are mostly unconcerned about a potential economic slowdown, believing the economy to be internally robust but vulnerable to mistakes.
Despite the US undergoing aggressive monetary tightening, there are hopes for a soft landing for the economy, although US Federal Reserve Chair Jerome Powell acknowledges that this outcome is only a possibility and dependent on external factors.
Fed Chairman Powell's response that a soft landing is not his base case and that factors outside their control may decide the outcome shocks the stock market, leading to three days of market declines, despite the recent surge in the US economy.
The US economy is currently in decent shape, with a resilient labor market, moderated inflation, and expected strong GDP growth, but there are potential headwinds and uncertainties ahead, including UAW strikes, student debt payments resuming, and the risk of a government shutdown, which could collectively have a significant impact on the economy. Additionally, the labor market is slowing down, inflation remains a concern, and the actions of the Federal Reserve and other factors could influence the economic outlook. While there are reasons for optimism, there are also risks to consider.
There are four risks that could potentially push the US economy into a recession sooner rather than later, including a weakening labor market, headwinds for the consumer, high borrowing rates, and the rising chances of a government shutdown, according to Raymond James.
Deutsche Bank's economists are still predicting a US recession despite the ongoing resilience of the economy, pointing to rapidly rising interest rates, surging inflation, an inverted yield curve, and oil price shocks as the four key triggers that historically have caused recessions and are currently happening.
The US economy is performing better than expected in the midst of pressure from the BRICS alliance, with Bank of America CEO Brian Moynihan predicting a soft landing but cautioning that inflation remains a top concern.
The Federal Reserve is in a better position to deliver a soft landing for the U.S. economy due to facing different problems compared to the 2007-2008 financial crisis, according to F/m Investments CIO and President Alex Morris.
The surge in long-term Treasury yields is jeopardizing the Federal Reserve's plans for a soft landing as it keeps interest rates high, increasing the risk of a recession.
A wave of corporate bankruptcies and debt defaults, driven by high interest rates, could potentially push the US economy into a recession, as global corporate defaults reach their highest levels since 2009 and borrowing costs for firms significantly rise.
The US job market added fewer jobs than expected in June, indicating a slower rate of growth, but economists suggest that this is a positive sign of a soft landing for the economy.
Despite warnings from reliable leading indicators, the dominant view is that there will be a "soft landing" with a slowdown in the US economy but no recession, however, indicators such as the ISM Manufacturing New Orders Index suggest that a recession will begin within the next few months.
Economists are predicting that the U.S. economy is less likely to experience a recession in the next year, with the likelihood dropping below 50% for the first time since last year, thanks to factors such as falling inflation, the Federal Reserve halting interest rate hikes, and a strong labor market.
The U.S. economy is facing risks in 2024 as inflation remains high and interest rates are historically high, leading to concerns about a potential recession; however, the Federal Reserve is optimistic about achieving a soft landing and maintaining economic growth. Economists are divided on whether the Fed's measures will be effective in avoiding a severe recession, and investors are advised to proceed cautiously in their financial decisions.
The belief is that the Federal Reserve will engineer a soft landing for the economy, which is expected to result in a rise in the stock market.
A recession is expected to hit the US economy in the next nine months due to rising borrowing costs, a tapped out consumer, and ongoing labor strikes, according to Raymond James.
The US economy is heading towards a recession that is likely to be milder than previous ones, as it is being "engineered" by the Federal Reserve and they have the ability to reverse the measures that slowed growth.
