It’s too soon to declare victory, but Federal Reserve Chair Jerome Powell is on track to navigate the U.S. economy to a soft landing.
That’s the view of Jan Hatzius, the chief economist of Goldman Sachs, in a new note to clients.
“Since the FOMC started hiking the funds rate early this year, we have argued that the U.S. economy can achieve a soft landing, even though the path is narrow. It requires sustained below-trend output growth, a rebalancing of the labor market via sharply lower job openings coupled with a moderate rise in unemployment, and a large decline in inflation. While much can still go wrong and our probability that a (mild) recession will start in the next year remains about one in three, we see some encouraging signs that the economy is moving toward all three of these goals,” he said in a note to clients.