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Can the FOMC Achieve a Soft Landing in 2020?

February 11, 2020

Presentation (pdf) | Press Release

St. Louis Fed President James Bullard discussed how actions by the Federal Open Market Committee (FOMC) have changed the outlook for shorter-term U.S. interest rates considerably since November 2018, ultimately providing more accommodation to the economy. “This has helped to create a reasonable prospect that the U.S. economy will achieve a soft landing in 2020,” he said during a presentation to the CFA Society St. Louis.

Bullard also discussed three questions about a soft landing. “One question for 2020 is whether global trade policy uncertainty has sufficiently been dampened to now encourage global manufacturing,” he said. Another question is whether interest-sensitive sectors in the U.S. will respond to the 2019 change in U.S. monetary policy, Bullard pointed out. And the third question is whether the coronavirus outbreak in China is likely to be contained as other viral outbreaks have been, he noted. “The answer to all three questions is, ‘Let’s wait and see,’” he said.