What will it take to bring down inflation within comfort zone? Arnab Das explains

economictimes.indiatimes.com:

«Mainly, I think because the economy has been so resilient in the US and indeed in many other countries. And I think the economy has been very resilient because people have really been experiencing very high employment,» says Arnab Das, Global Market Strategist-EMEA, Invesco.So JP Morgan has called of a recessionary forecast, but is expecting an anaemic growth forecast still. It is incredible because it was expecting a recession to be encountered in 2023. So, what has really changed? And how do you see this commentary?Well, so I think we at Invesco have been in softish or bumpy landing kind of camp rather than the recession camp.

I think a lot of people are sort of, it looks like, throwing in the towel on the recession forecast and expecting a reasonable growth rate. Mainly, I think because the economy has been so resilient in the US and indeed in many other countries. And I think the economy has been very resilient because people have really been experiencing very high employment.

Even if inflation had been very high and real incomes, real wages had been falling for some time, at least they were still very heavily employed. And throughout the Western world, including especially in the US, you have a very tight labour market. So people have jobs, people have income, and people are spending that income and that income has been rising, although slower than inflation for some time.

In the US now it is rising a bit faster than inflation as inflation falls. I think it is also a very different kind of economic growth story than the conventional cycle. And part of the problem is that people are expecting the post-pandemic economy, the wartime economy in some cases to behave as if it was in a conventional cycle or at least for