Forget About a Soft Landing, What’s the Shape of the Hard Landing? – Mish Talk

Hot Economy, Rising Inflation

In Hot Economy, Rising Inflation the WSJ notes The Fed Has Never Successfully Fixed a Problem Like This. That link is not paywalled for those who wish to read.

Key Points 

• During the past 80 years, the Fed has never lowered inflation as much as it is setting out to do now—by four percentage points—without causing recession.
• “No one expects that bringing about a soft landing will be straightforward in the current context—very little is straightforward in the current context,” Fed Chairman Jerome Powell said last month. The central bank, he added, faces a “challenging task.”
• Goldman analysts estimate the Fed can achieve its goal of bringing down inflation and slowing upward wage pressures by reducing job openings by about 2.5 million.
• “There is plenty of room for businesses to reduce the number of job openings,” said Lael Brainard, a Fed governor awaiting Senate confirmation to become Fed vice chairwoman, in an interview with The Wall Street Journal last week. “I see that as being consistent both in bringing inflation down and sustaining the recovery.”