Central Banks
US Economic Soft Landing Hinges on Fed’s Tolerance of Inflation
- Fed set to raise interest rates in what could be its last hike
- Summers, El-Erian differ on best strategy for Fed to pursue
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Rising hopes of a soft landing for the US economy likely hinge on the Federal Reserve’s willingness to tolerate inflation markedly higher than it would prefer.
After taking a break from tightening credit last month, Fed Chairman Jerome Powell and his colleagues look locked in to raising interest rates by a quarter percentage point this week. The aim: To slow the economy enough to reduce inflation to its 2% target over time, without crashing the US into a recession — a proverbial soft landing.