Fed Navigating Toward Possible Soft Landing As Inflation Cools and Jobs Market Holds Steady
• Fed making progress on taming inflation without major job market damage; soft landing increasingly conceivable • Best-case outcome not inevitable but data shows continued low unemployment and 6-month inflation below 2% target • Risks remain - delayed rate hike impacts could hit harder than expected or outside shocks/sticky inflation • Timing and pace of any rate cuts depends on inflation continuing to fall and smooth economic performance • No policy on autopilot; incoming data this year will guide decisions on potential additional hikes