Inflation Cools and Consumers Confident, But Spending Set to Slow As Fed Seeks Soft Landing
• Inflation has come down meaningfully, though more decline is needed to reach 2% target • Yellen sees economy heading for a soft landing and views recession risk as not particularly high • Consumer confidence has ticked up recently as inflation cools and earnings rise • Expect pace of consumer spending to slow from an unsustainably high level • Trusts the Fed to calibrate interest rates as it manages risks of high inflation vs. weak growth