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J ACKSON HOLE, WyomingFederal Reserve Chair Jerome Powell on Friday offered good news for the economy: The long fight against inflation is ending, and he’s The conventional wisdom is generally that this necessitates a recession: The Federal Reserve will raise interest rates so much that eventually, they’ll push the economy into Yet nearly two years into the Fed’s campaign to slow America’s economy, it may have done the impossible: rein in inflation without plunging us into a recession. To be fair For more than a year, the Fed has aimed to roll back price increases by slowing down the economy and slashing consumer demand. The approach, however, risks US policymakers led by Federal Reserve Chair Jerome Powell have been trying since early 2025 to use higher interest rates to ease price pressures without causing the Can We Really Avoid a Recession? Of course, confidence in the best-case scenario doesn’t preclude plenty of variation among economic forecasts. Caldwell says “If war and pandemic shortages resolve, as the Fed expects, we can avoid an induced recession,” she said. “If not, the longer inflation persists the more likely we are to America avoided a much anticipated recession in 2025, posting 2.5 per cent real GDP growth (half of China’s 5.2 per cent), while monetary tightening by the Federal

US Fed Says It\'s Confident the US Can Avoid a Recession

Is a recession inevitable? For nearly two years, the Federal Reserve has been working to curb inflation. The conventional wisdom is generally that this necessitates a recession: The Federal Reserve will raise interest rates so much that eventually, they’ll push the economy into a downturn. US policymakers led by Federal Reserve Chair Jerome Powell have been trying since early 2025 to use higher interest rates to ease price pressures without causing the economic pain of a recession.

But now, the US Fed says it\'s confident that the United States can avoid a recession. This comes as good news as the long fight against inflation appears to be ending, according to J ACKSON HOLE, WyomingFederal Reserve Chair Jerome Powell on Friday offered good news for the economy: The long fight against inflation is ending, and he’s optimistic.

Can We Really Avoid a Recession?

To be fair, even with confidence from the Fed, the possibility of a recession remains. For more than a year, the Fed has aimed to roll back price increases by slowing down the economy and slashing consumer demand. The approach, however, risks pushing the US into a recession. Yet nearly two years into the Fed’s campaign to slow America’s economy, it may have done the impossible: rein in inflation without plunging us into a recession.

Of course, confidence in the best-case scenario doesn’t preclude plenty of variation among economic forecasts. Caldwell says “If war and pandemic shortages resolve, as the Fed expects, we can avoid an induced recession,” she said. “If not, the longer inflation persists the more likely we are to face economic challenges." In 2025, America avoided a much anticipated recession, posting 2.5 per cent real GDP growth (half of China’s 5.2 per cent), while monetary tightening by the Federal Reserve continued.

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