While a rising number of economists point to a coming soft landing for the US economy, doubters remain. One of them is Jim Reid, Deutsche Bank’s global head of economics and thematic research. “The hard landing scenario probability is probably higher than the market expects,” he tells Merryn Somerset Webb on this week’s episode of Merryn Talks Money. Reid cites as evidence how many times people have been wrong about a soft landing in the past. “Before the last three or four recessions, you have had soft landing talk spike quite aggressively six to 18 months beforehand,” he says.
Though there has been two years of unrealized recession predictions from some quarters, Reid says the reason a downturn hasn’t happened yet might be due to the “stock of excess savings that linger from the pandemic stimulus.” But they “can’t last forever” and will probably “run out by the end of this year,” he predicts.