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.
Federal Reserve Chair Jerome H. Powell stated in a speech at the Jackson Hole symposium that the central bank is prepared to raise interest rates further if needed, signaling that they do not believe inflation is fully under control. The Fed will proceed cautiously and assess economic data as they determine whether to make further policy adjustments.
Federal Reserve Chair Jerome Powell warned that inflation and economic growth remain too high and interest rates may continue to rise and remain restrictive for longer, while U.S. stocks rebounded and European markets closed slightly higher. Meanwhile, U.S. Trade Representative Katherine Tai highlighted China's dominance in rare earth metals and the vulnerability of U.S. supply chains. Grocery delivery company Instacart filed paperwork for an IPO, and upcoming PCE and jobs data will provide insights into the Fed's rate decisions. Powell's ambiguous remarks at the Jackson Hole symposium led markets to focus on the prospect of a stronger economy rather than interest rate warnings.
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.
The Federal Reserve meeting in September may hold the key to the end of the tightening cycle, as markets anticipate a rate hike in November, aligning with the Fed's thinking on its peak rate. However, disagreement among Fed policymakers regarding the strength of the economy and inflation raises questions about the clarity and certainty of the Fed's guidance. Market skeptics remain uncertain about the possibility of a "soft landing," with sustained economic expansion following a period of tightening.
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 U.S. economy is defying expectations with continued growth, falling inflation, and a strong stock market; however, there is uncertainty about the near-term outlook and it depends on the economy's future course and the actions of the Federal Reserve.
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.
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 resilient growth of the US economy is fueling a rebound in the dollar and causing bearish investors to rethink their positions, although the currency's rally may face challenges from upcoming data and the Federal Reserve's meeting this month.
Treasury Secretary Janet Yellen believes the US economy is on a path that will prevent a recession while maintaining control over inflation, as polls show increasing optimism among Americans; she also expects a strong labor market despite slower economic growth.
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.
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 left interest rates unchanged while revising its forecasts for economic growth, unemployment, and inflation, indicating a "higher for longer" stance on interest rates and potentially only one more rate hike this year. The Fed aims to achieve a soft landing for the economy and believes it can withstand higher rates, but external complications such as rising oil prices and an auto strike could influence future decisions.
Federal Reserve Chairman Jay Powell is facing multiple threats to the economy, including the ongoing United Auto Workers strike, rising oil prices, the resumption of student loan payments, higher long-term interest rates, and a potential government shutdown.
The US economy may struggle to achieve a "soft landing" with low inflation and low unemployment due to several economic uncertainties and headwinds, including toughened lending standards and the resumption of student loan payments, according to experts.
The Federal Reserve's power to control the flow of dollars in the US is theoretical, as global credit flows freely and much of it finds its way to the US regardless of the Fed's desires, making the concept of a "soft landing" engineered by central bankers impossible and needless.
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 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.
U.S. Federal Reserve Chair Jerome Powell acknowledges that the U.S. economy is still grappling with the effects of the COVID-19 pandemic, highlighting labor shortages in healthcare and ongoing difficulties with access to child care.
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.
Treasury Secretary Janet Yellen remains optimistic about the US economy despite challenges such as record inflation, rising interest rates, and geopolitical conflicts, citing the strong labor market and resilient consumer as contributing factors to a soft landing, while also discussing the potential impact of artificial intelligence on the economy and the need for Congress to allocate funds for Ukraine.
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.
The US Federal Reserve should proceed carefully when deciding whether or not to hike interest rates further to bring down inflation, according to two senior officials, as they aim for a "soft landing" to tackle inflation without harming the US economy.
Some Federal Reserve officials are optimistic about finding a monetary policy that lowers inflation to their 2% target without causing high unemployment, but there are risks that could push the Fed onto a more familiar path of an economy struggling with rising borrowing costs and waning confidence.
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.
Federal Reserve Chair Jerome Powell indicated that the strength of the U.S. economy and tight labor markets could warrant further interest rate increases, countering market expectations that rate hikes had come to an end. Powell also acknowledged that inflation is still too high and further rate increases could be necessary.
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.
Federal Reserve Board chairman Jay Powell spoke at the Economic Club of New York and emphasized the importance of humility and relying on evidence when making monetary policy, stating that the evidence suggests the economy is expanding at a solid pace.
