Jay Parsons examines whether the U.S. economy can pull off a soft landing. Economists dismissed it as unlikely, but recent data suggest it's happening. The biggest risks: the Fed tightening too much, job losses, or wage drops combined with oversupply.
The bigger risk, of course, is what's happening with the economy. I think all of us kind of snickered at the soft landing idea a year ago, but you know, so far that's kind of playing out. And so we've seen a lot of economists that are revising their outlooks and pushing out recession forecasts and whatnot. But you know, that's still a real fear. If potentially the Fed overpushes too hard on rates, or if jobs start to suddenly disappear, if wage growth disappears, those are real potential headwinds. So they're not in place now. But if we do get into an environment where the economy's contracting, jobs are contracting at the same time, we're seeing record supply, that's when the outlook's going to look a lot more challenging.
