Bill Dudley, Columnist

A US Soft Landing? Even the Fed Doesn’t Believe It

Unless 3.6% unemployment is the new normal, the central bank has more tightening to do.

August 1, 2023 at 9:00 AM UTC

Bill Dudley is a Bloomberg Opinion columnist. A former president of the Federal Reserve Bank of New York, he is a member of Coinbase Global's advisory council.

Coming in for a landing.
Photo: FPG/Archive Photos/Hulton Archive/Getty Images

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After a string of encouraging data, markets are displaying increasing optimism that the Federal Reserve might be done with its battle against inflation — and that the US will experience a rare “soft landing,” in which inflation falls back to 2% and the economy cools without dipping into recession.

I can imagine how this could happen, but it requires some extremely positive thinking.