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2026-02-15 22:31:20
Nick Timiraos, a vocal advocate for the Federal Reserve, writes that key indicators of the U.S. economy are moving in a positive direction: inflation is declining, the labor market remains strong, and economic growth is solid. While this is not a definitive conclusion, the U.S. economy is very close to a soft landing (i.e., curbing inflation while avoiding a recession). Four years ago, many economists thought this was impossible, but now the scenario of the U.S. economy bringing inflation back to the Fed's 2% target without falling into recession is becoming credible again. However, vigilance is still necessary. The Fed's preferred inflation gauge, the core PCE annual rate, is currently close to 3%. Many forecasters predict that inflation will struggle to make significant progress this year as tariff-related price increases spread to more areas. Meanwhile, the labor market may not be as robust as last week's report indicated. Payden & Rygel's chief economist, Jeffrey Cleveland, stated that objectively, the labor market has been weak, and the unemployment rate is more likely to rise than fall this year.
