a-recession-can-be-avoided-if-americans-accept-4%-inflation

A recession can be avoided if Americans accept 4% inflation

Peter Morici

Published: July 13, 2022 at 6:00 a.m. ET

Consumer spending should remain strong enough to keep the economy going even as unemployment drifts slightly higher

Federal Reserve Chairman Jerome Powell now recognizes it will be difficult to avoid a recession, but accomplishing this soft landing will depend on accepting a higher inflation target than 2%.

The Fed began raising the federal funds rate in March, but mortgage rates began moving up in January. Contracts to purchase existing homes began tailing off in January, home sales followed in February, and ultimately lumber prices, a bellwether for building materials, declined.  

The…

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