The missions of the Japanese SLIM probe and the American Odysseus module this year demonstrated how difficult it is to achieve a soft landing on the Moon. This term from the space race was adopted by the Federal Reserve to describe the concept of curbing inflation without causing a recession that would trigger a sharp rise in unemployment. In the economy, a soft landing is almost as difficult to achieve as it is on the Moon.
It has been the goal of Fed chairman Jerome Powell for more than two years. Now that inflation has lost altitude, the fear is that the ship will run out of fuel. This is leading to a change of cycle in monetary policy, as confirmed this weekend at the Fed's annual economic conference.
...the U.S. central bank chief on Friday to mark the turning point. It was practically a commitment that he will lower the price of money at the Fed meeting on September 18.
Karl Otto Pohl used to say that inflation is like toothpaste: once it is out of the tube, it is very difficult to put it back in. But after three years, Powell believes he has almost achieved it. My confidence has grown that inflation is on a sustainable path back to 2%.
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