[New Year Interview] Barry Eichengreen: "High Possibility of a Soft Landing for the US Economy"

Interview with International Economy and Finance Scholar Barry Eichengreen
"The Whole World Will Survive the Recession"

"The probability of the United States entering a recession this year is low."

Barry Eichengreen, a world-renowned scholar in international economics and finance and a professor at UC Berkeley, stated in a written interview with our newspaper on the 3rd, "I estimate the probability of a soft landing for the U.S. economy this year at two-thirds." Professor Eichengreen is an economist whose research on the Great Depression greatly influenced the monetary policy of former Federal Reserve (Fed) Chairman Ben Bernanke.

To mark the New Year 2024, Asia Economy News interviewed leading economists from major countries including the United States, China, and Japan about global economic prospects. The most notable focus is the United States, the world's largest economy, which has led the global high-interest-rate era with steep rate hikes not seen in decades. Due to the Fed's monetary tightening, inflation, which peaked at 9.1% in June 2022, slowed to 3.1% in November last year, and the previously overheated labor market is gradually cooling down. Market opinions are divided on whether this signals a soft landing or signs of economic slowdown due to accumulated tightening.

Regarding this, Professor Eichengreen said, "Inflation is gradually continuing to cool, and the labor market is slightly cooling as well, reducing the likelihood that wage-driven inflation will become a problem," adding, "This aligns with the soft landing scenario." He further predicted, "The world will be able to survive the recession this year."

He also expects the timing of the U.S. interest rate cuts to be later than the market anticipates. He predicted, "If a U.S. recession does not occur, the Fed will lower rates only after confirming a sustained decline in inflation."

This content was produced with the assistance of AI translation services.