The soft-landing narrative for the US economy assumes that a northern summertime string of comforting inflation data, both at the consumer and producer levels, opens the door even wider for the Federal Reserve to declare as early as next month the end to one of the most concentrated rate-raising cycles in decades.
With that, the economy would avoid a recession, interest rates would fall in an orderly fashion, stocks would build on their already impressive gains, and highly levered corporate exposures would be normalised methodically.
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Bloomberg Opinion
Mohamed A. El-Erian, is president of Queens’ College at the University of Cambridge and a professor at the Wharton School of the University of Pennsylvania
