As recession fears loom large, can the Fed finesse a ‘soft landing’?

WALL Street strategists are increasingly sceptical that the US Federal Reserve can finesse a “soft landing”, and return the soaring hot-air balloon of inflation back to earth without bringing the US economy crashing down with it.

The landing process has already begun. According to Automated Data Processing, a payroll processing company, companies slowed the pace of hiring in August amid mounting fears of an economic slowdown. Private payrolls grew by 132,000 last month, down sharply from the gain of 268,000 in July.

It was always going to be a tricky piece of piloting. When prices are as elevated as is currently the case, it’s almost impossible to keep the flame of demand lit while bringing inflation down to comfortable levels.