Janet Yellen Says We Need Good Luck and Great Skill? We’re Screwed.
Have you ever seen former New England Patriots star Julian Edelman’s unbelievable catch as part of the team’s 25-point comeback in Super Bowl 51? It undoubtedly took “great skill” and “good luck” — thanks to his years of practice and determination.
Unfortunately for the U.S. economy, the Federal Reserve is also going to need the same level of preparation and serendipity to avoid economic ruin, and Treasury Secretary Janet Yellen is no Julian Edelman. On Sunday, Yellen told CNN, “The Fed is going to need great skill and also some good luck to achieve what we sometimes call a soft landing.” More precisely, she is referring to an economy where inflation falls below 2% and unemployment remains low. If the American economy does not achieve that “soft landing,” it is likely we will be plunged into a recession after a hard landing. Meanwhile, Federal Reserve Chairman Jerome Powell has been pledging to bring the pain through a series of measures like raising interest rates. Others, like Elon Musk and a Goldman Sachs economist, fear that move could cause deflation. So according to some of the smartest folks in the room — at least based on popular opinion — America’s options are either a hard landing and subsequent recession, deflation, or throwing our hopes on a wing and a prayer. At this point in the column, readers might be feeling pretty uneasy about our nation’s experts’ ability to solve inflation.