US economy on track for soft landing

Hibapress

The American economy is “on the right track” to control inflation and make a soft landing without suffering a deep economic slowdown, Treasury Secretary Janet Yellen assured Tuesday.

“To me, a soft landing means that the economy continues to grow, the job market remains strong and inflation falls. And I believe that is the path we are on,” Yellen added during a meeting organized by the Wall Street Journal in Washington.

The Treasury Secretary’s comments come on a day when monthly data from the Labor Department showed that inflation remained almost flat, with the consumer price index rising 3.1% in November from the last year.

This is a slight slowdown from October’s 3.2% figure.

Economists have been debating for months whether the U.S. economy could have a soft landing. Earlier this year, the majority of economists predicted that the economy would enter a recession, although those expectations have faded over time.

Yellen, a former Federal Reserve chair, noted that data shows inflation is falling toward the Fed’s 2% target.

“It’s certainly going down significantly.” And I see no reason…why inflation should not gradually decline to levels consistent with the Fed’s objectives,” she said.

Since March 2022, the Fed has increased its key policy rate from nearly zero percent to a range of 5.25% to 5.5% in an effort to control inflation.