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US Economy Soft Landing
The US economy is expected to moderate, experiencing a soft landing with declining inflation, allowing for gradual interest rate cuts.
Timeframe
near-term
Categories
Subcategories
Impact areas
Detailed Analysis
The US economy is transitioning to a period of slower growth, marked by cooling domestic demand and stabilizing labor market conditions. This 'soft landing' scenario is supported by reduced economic imbalances and declining inflation, allowing the Federal Reserve to gradually cut interest rates towards neutral levels. "The US economy is transitioning to slower growth, with a soft landing expected amid reduced imbalances and declining inflation."
Context Signals
Fed expected to lower rates to 3.5% by summer 2025
Non-residential investment, particularly in technology and AI, expected to continue growing
Consumer behavior aligning with disposable income growth
Edge
The soft landing could extend the current economic cycle longer than anticipated, creating further investment opportunities.
The Fed's actions will be heavily influenced by the outcome of the US election, potentially leading to a less predictable rate path.
The shift in US policy could create opportunities for value investing and mid-cap stocks as hedges against declines in growth and mega-cap stocks.
