Allison Schrager, Columnist

A Soft Landing Won’t Mean the Economy Is Safe

Even a “Goldilocks” Fed will have to deal with the three bears of inflation, disease and politics.

January 12, 2023 at 11:30 AM UTC

Allison Schrager is a Bloomberg Opinion columnist covering economics. A senior fellow at the Manhattan Institute, she is author of “An Economist Walks Into a Brothel: And Other Unexpected Places to Understand Risk.”

Jobs are holding up, but don’t take off those hard hats yet.
Photographer: Patrick T. Fallon/AFP

Provide news feedback or report an error

Site feedback:

Take our Survey

This article is for subscribers only.

Since we gave up on the idea that high inflation would be transitory, the hope has been that we would manage a soft landing: Inflation would melt back to 2% without doing too much harm to the labor market or economic growth. That’s what the Federal Reserve has predicted for months, even as economists warned it was extremely unlikely. Now it seems a soft landing is a real possibility. Inflation is falling and the labor market remains strong with unemployment at a 50-year low and wage growth of 4.6%.

If these trends continue, the “immaculate disinflation” the Fed projected will become a reality. But don't celebrate yet. That won't mean we dodged a bullet.