By Howard Schneider
WASHINGTON (Reuters) – The soft landing, it appears, will not be televised.
At least it won’t be announced, declared, or advertised, Federal Reserve Chair Jerome Powell told members of the U.S. House Financial Services Committee in testimony that wove around direct mentions of the upcoming presidential election and efforts to pull him into disputes over fiscal spending, energy policy, and housing, or any claim that the Fed’s sought-after “soft landing” – of low inflation and low unemployment – had already arrived.
“Will there be some announcement at some point that we’ve had a soft landing?…Some official statement that would give people some comfort?,” Representative Al Green, a Texas Democrat, asked Powell while also noting a campaign-year climate in which claims the economy was sliding into recession competed against data showing a low jobless rate, falling inflation, and steady growth.
“I don’t think by us, no,” Powell said. “We are just going to keep our heads down and do our jobs and try to deliver what the public is expecting from us. We wouldn’t be declaring victory like that.”
The exchange highlighted how central Powell and Fed policy could figure into the coming rematch between President Joe Biden and former President Donald Trump.
Regardless of their differences, both men share having appointed Powell as Fed chair.
They may now see their electoral fate tied, to some degree, to Powell’s actions as chair – and whether the November vote approaches in a climate of continued low unemployment, slowing inflation, and perhaps falling interest rates, or not.
Powell’s aim in what could be a volatile few months in U.S. political discourse is to avoid appearing to favor either candidate as Fed decisions spool out, or get caught too much in the crossfire.
In the middle of a four-year term that expires in May, 2026, regardless of who wins in November, Powell said the U.S. was on “a good path” with conditions consistent with a soft landing.
In fact some analysts feel it has already arrived, with inflation by some measures near the central bank’s 2% target and an unemployment rate that has remained below 4% for two years.
But don’t expect a victory lap.
“That’s the economy that we’re trying to achieve. We’re on a good path so far to be able to get there,” Powell said, but “I don’t want to put the label on it. Other people can do that.”
(Reporting by Howard Schneider; Editing by Andrea Ricci)