We don't need a recession - which would be devastating - to solve our inflation problem | Mark Weisbrot

"At his press conference Wednesday, Powell said that 'having a soft landing is what we’re aiming for' but added: 'At the beginning we said it was not going to be easy. It was going to be quite challenging to do that. It’s unusual. It’s an unusual event. It’s not a typical event, given where we are.'

But the Fed has not explained why a 'soft landing' — avoiding a recession — would be so difficult. We do not have a giant real-estate bubble as in 2006, or a stock-market bubble as in the late ’90s. Both of these were so large that it could be shown in advance (and it was shown) that they were unsustainable and capable of causing a recession when they burst."

Updated: July 30, 2022
published at MarketWatch and CEPR