Will US Fed manage soft landing?
So, what is soft-landing and what is hard-landing. US Fed primary object currently is to bring long term inflation around 2% and inflation target for 2022 is at 4.6%. Last US CPI & Core CPI data released on 12-Jul-22 came at 9.1% & 5.90% respectively.
After tapper tantrum in 2013, where US Fed moves to control inflation led to financial crisis led by sudden sell-off in equity, commodity and emerging market currency.
Soft landing: US Fed wants to bring inflation down without causing financial crisis.
Hard landing: Repeat of financial crisis led by sudden monitory tightening by US Fed followed by other central banks.
In June 2022, global market including India was near 52-week low and stocks specific correction up to 50% to 70%. Since then, data continue to remain at elevated level, but narrative have changed as some easing is seen in commodity prices.
Categories
Global Market – Will US Fed manage soft landing?
This week we will discuss US Fed decision and whether US Fed will be able to do soft landing or it will be crash landing. US advance GDP data for second quarter came in negative territory at 0.9%.
US Fed increase rate by 75 bps to 2.25% – 2.50%, in-line with market expectation. US Fed will continue to downsize balance. Key points from US Fed chairman Jerome Powell press conference.
Click on the attachment to read the full report: