US Federal Reserve: Will the strong economy enable a soft landing or is a recession imminent?

US Federal Reserve: Will the strong economy enable a soft landing or is a recession imminent?

According to a report by finanzmarktwelt.de, the US Federal Reserve Bank expresses optimism that the US economy will not experience a recession. The Fed is expected to take a pause on interest rates. However, the article shows that the Fed has had a poor track record of predicting recessions in the past and has often been overly optimistic. Despite a strong third quarter of 2023 and the Fed raising growth forecasts for the coming years, there are warning signs of a possible recession. These warning signs include a negative US Conference Board Leading Indicators Index, an inverted yield curve and reduced velocity of money. The weakness of the global economy and possible financial constraints among consumers also point to a possible recession. History shows that both the Fed and economists often cannot predict recessions. A recession can therefore occur unexpectedly and take many investors and economists by surprise. It therefore remains to be seen whether the Fed's optimistic assessment is correct or not.