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2022-01-12

If they’re right, policymakers will have managed to steer the U.S. economy to a soft landing

Global equity markets were worth about $150 trillion at the end of 2021, having doubled in value since March 2020. 

The broad S&P 500 index of U.S. stocks even managed to go up on the day the Fed announced it would be tapering off its bond purchases faster to clear the runway for rate liftoff.

Many emerging-market economies will face a difficult choice Ziad Daoud of Bloomberg Economics has identified five that are especially vulnerable to rising U.S. rates: Brazil, Egypt, Argentina, South Africa, and Turkey, or the Beasts

Fed’s latest forecasts for the unemployment rate and core inflation as consistent with six hikes. But even that would barely take the main U.S. policy rate above 1% by yearend, well below inflation and below the pre-Covid level.

It’s been more than four decades since the U.S. saw a wage-price spiral. For America’s hourly workers, pay has barely kept up with inflation since the 1980s

Then inflation will start gravitating back toward the Fed’s long-term goal of 2%. If they’re right, policymakers will have managed to steer the U.S. economy to a soft landing and avoid a recession. If they’re wrong, 2023 will be the year we all pay the price.

Stephanie Flanders Bloomberg 12 januari 2022 

https://www.bloomberg.com/news/features/2022-01-12/central-banks-not-covid-will-drive-global-economies-in-2022


About Stephanie

https://englundmacro.blogspot.com/2012/01/bbc-stephanie-om-s.html


Lawrence Summers - challenging for the Fed executing a soft landing

Bloomberg 7 January 2022

https://englundmacro.blogspot.com/2022/01/lawrence-summers-challenging-for-fed.html





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