Aiming for a ‘soft landing’

How to to cool off inflation without sinking into recession

The Federal Reserve sees several avenues to solve the problem of inflation without a recession, but none of them will be easy, Chair Jerome Powell said Tuesday.

The central bank is focused solely on a single objective: a “soft landing” for the US economy. The phrase describes the ideal scenario in which inflation returns to the Fed’s 2% target while unemployment remains low.

Yet trying to accomplish such a landing would require some careful maneuvering. Economic growth has begun to slow with the Fed raising rates, but if spending cools too quickly, companies could halt their hiring plans or even lay off employees.

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