Fed Pivot Risks an Overheating and a Hard Landing
Jerome Powell’s lack of pushback in the face of the bond market's bullishness will make the Fed’s job that much harder.
Photographer: Samuel Corum/BloombergThis article is for subscribers only.
In the Federal Reserve’s eagerness to stick a soft landing for the US economy, central bank policymakers have unintentionally increased the risk of a hard landing. That’s because the recent loosening of financial conditions, fueled by Chair Jerome Powell’s lack of pushback in the face of the market’s increasingly bullish sentiment, will make the Fed’s job of bringing inflation down that much harder with the US economy still running above potential growth.
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