As the U.S. economy continues to rebound from the pandemic, some economists are skeptical about the idea of a “soft landing.” The term describes a scenario in which the economy slows down without experiencing a sharp decline or recession.
A new survey has found that economists are not convinced that the Federal Reserve will be able to control inflation and get it down to 2% without sinking the economy. At the same time, another survey suggests that labor constraints, inflation and recession are huge issues that might endanger the business.
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Results Of The Survey
The first survey, conducted by the National Association for Business Economics (NABE) on Aug. 19, found that only 10% of respondents were confident that the Fed would successfully bring down inflation without destroying the economy. On the other hand,14% were somewhat confident, 52% were highly skeptical, and 21% of members were sure that the Fed would fail in achieving its goal.
Another survey conducted by Stifel found that labor constraints (64% of respondents) are the biggest perceived threat to business. Inflation (59%) and a potential recession (54%) were also cited as top concerns. However, respondents acknowledged that the U.S. labor market is still in good shape, with unemployment remaining near historic lows.
Several factors could contribute to a recession, including high levels of debt, slowing global growth, and trade tensions. However, some economists believe that a recession is not inevitable and that steps can be taken to mitigate its effects.
What Does This Disbelief In The Fed Indicate?
The findings from the NABE survey suggest that three-quarters of executives out of 198 suspect the Fed can avoid an economic crisis. It also found that most executives fear a potential downturn. It is worth noting that these respondents work for private-sector companies. As a result, executives may delay launching new projects and investments due to their predictions or advice.
Everyone will be waiting for the recession to pass before entering the market or making investments, which might lead to an economic downturn. At the same time, many executives are anticipating a recession and are taking steps to prepare for it.
