"soft landing"?
As I drove T to the airport I told him about the new interest-rate inversion caused by the Fed, and my resuting official Recession Watch.
He asked, "What are the chances of a soft landing?"
There's usually talk, when the Fed increases rates to slow down the economy, of aiming for a "soft landing" instead of a recession. A period of slow growth that doesn't tip into mass layoffs and financial crises.
It all depends on the Fed and when they finally cut interest rates. If they keep short-term rates higher than long-term rates for at least 8-10 months, then we'll have a recession. If they retreat sooner, such as after five months, then we won't have a recession.
I can't predict what this small group of humans on the Fed will do -- which is why I'm on a Recession Watch, not a Recession Warning, at this time. But with inflation so high, I don't see them retreating yet.
He asked, "What are the chances of a soft landing?"
There's usually talk, when the Fed increases rates to slow down the economy, of aiming for a "soft landing" instead of a recession. A period of slow growth that doesn't tip into mass layoffs and financial crises.
It all depends on the Fed and when they finally cut interest rates. If they keep short-term rates higher than long-term rates for at least 8-10 months, then we'll have a recession. If they retreat sooner, such as after five months, then we won't have a recession.
I can't predict what this small group of humans on the Fed will do -- which is why I'm on a Recession Watch, not a Recession Warning, at this time. But with inflation so high, I don't see them retreating yet.