In late September of last year, Federal Reserve Chair Jerome Powell came clean with reporters at a news conference in Washington, D.C., admitting that his battle with inflation was going to be more challenging than anticipated and the odds of a “soft landing” for the economy were “likely to diminish.” Seven months later, the Fed has abandoned its soft landing forecast altogether. Minutes from the latest Federal Open Market Committee (FOMC) meeting, which took place on March 21 and 22, show the central bank’s economists expect a recession later this year.
The economists’ outlook has featured “subdued” growth and “some softening” in the labor market for months now, but after the recent banking instability, headlined by the second and third largest bank failures in U.S. history, they’ve become even more pessimistic.
