There’s growing consensus that the economy is heading toward or is in a recession. However, some believe that the forecasted downturn will be mild. I’m not convinced. Here’s why.
Some experts are embracing the notion of a soft landing, the belief that recent interest rate hikes will translate into a modest decline in growth. However, such claims lack evidence. The history of the Federal Reserve and its monetary management doesn’t lend much credence to any soft-landing optimism.
The latest proof of that comes from economists Alex Domash and Lawrence Summers, who addressed these claims in a recent paper analyzing rate hikes since 1955. The scholars found there has never been a time in which high nominal wage growth and very low unemployment weren’t followed by