Economists didn't think this was possible, but they've been wrong a lot lately, and in their defense it has only happened once (or maybe twice): we may be witnessing that rare achievement known as soft landing is known. The Federal Reserve's latest forecast is for inflation to fall back to 2% without major job losses or economic slowdown.
But before we celebrate this bravura monetary performance or conclude that unemployment and growth are not vulnerable to inflation or interest rates after all, allow me to make two observations, one looking back and one looking forward. Firstly, the last few years have been highly unusual. Second, this year marks the end of the free lunch economy.
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