Federal Reserve's Mouthpiece: The U.S. Economy May Face a Hard Landing

ChainCatcher news, Federal Reserve mouthpiece Nick Timiraos published an article in the Wall Street Journal stating that over the past year, U.S. economic policymakers have focused on achieving a so-called soft landing, which means reducing inflation without causing an economic recession. Now, a group of "new pilots" is considering changing course, and they themselves admit that this could lead the economy toward a hard landing.

In recent days, President Trump and his senior advisors have shown indifference to the rising risks of trade uncertainty hampering private sector investment. They believe that a detox may be needed in terms of spending and hiring, that falling stock values are not concerning, and that inflation may rise in the short term. Some analysts warn that Trump's messaging may reflect a strategic effort to improve the country's bargaining position with trade partners, leaving bond investors and the Federal Reserve stunned, thereby maintaining a tendency to cut interest rates.

Trump's impulsive behavior has prompted European authorities to take measures to increase economic stimulus and defense spending. Analysts say that the situation over the past two weeks indicates that Trump is unlikely to change course due to a market downturn, which will help reset Wall Street's expectations. Andy Laperriere, head of U.S. policy research at Piper Sandler, said: "Everything he is doing tells us he is not joking. He fundamentally believes this on tariffs."