Will the Fed Start Believing in a Soft Landing?

Can the Federal Reserve engineer a soft landing, in which it defeats excessive inflation without tipping the US economy into recession? This week, Fed officials will offer important clues as to whether that’s achievable.

The Sept. 19-20 meeting of the policy-making Federal Open Markets Committee isn’t likely to deliver any interest-rate surprises: Officials have amply signaled that there won’t be any further increase this time around. That said, they will update the Summary of Economic Projections, which lays out how they expect growth, inflation and unemployment to develop given appropriate monetary policy. Those projections haven’t been consistent with the soft landing that many in markets are already predicting, so any changes will be significant.