Fmr. Obama Treasury Counselor Rattner: There’s ‘No Precedent’ for Fixing Inflation in Economy This Overheated Without a Recession 

On Friday’s broadcast of Bloomberg’s “Wall Street Week,” Steve Rattner, who served as counselor to the Treasury Secretary in the Obama administration, stated that history “is not on the side” of a soft landing that brings inflation under control without causing a recession because there’s “no precedent” for fixing inflation in an economy as overheated as the current economy is without a recession. He also stated that economics isn’t the kind of science that can provide the level of precision avoiding a recession will take.

Rattner said, “I’m not at all in the camp of those who think that a recession is likely this year or probably even the second half — or first half rather, of next year. But, at some point, it becomes anybody’s guess whether we’ll get through this without a recession.”

He added, “History is not on the side of a soft landing. There’s really no precedent for bringing an economy this overheated, with inflation — whether it’s transitory, permanent, or whatever — running at this rate down to anything that looks like 2% without there being a recession. It would require the skill of the most experienced pilot in the world to achieve that kind of a soft landing. You have to really cool off demand. You have to, unfortunately, raise the unemployment rate, get some slack into the labor market, and that’s a level of precision that, economics is sort of a science, but it’s not that kind of a science.”

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