OK what is it that UCLA Anderson is trying to say? Talk about mixed messages. So they are saying there is no way this could be a soft landing but it won’t lead to a recession and home price won’t fall. But it will be bad.
Despite talk of a soft landing, a number of economists are warning that the economy could suffer a severe slowdown, if not a recession, or that inflation could reach higher levels.
Ed Leamer, director of the UCLA Anderson Forecast, doesn’t expect a recession to develop over the next year, but tells USA Today “this soft-landing scenario is a fantasy.”
He predicts that the housing slowdown will be much more severe than the Fed is saying. As a result, consumer spending, jobs, and overall growth could suffer, he says. “Anything housing-related is going to feel like a recession, almost like a depression,” says Leamer.
“Energy prices matter, but they don’t play the kind of role that housing is going to play,” says UCLA’s Leamer. “The Fed can do very little now. … It made a major error by letting this housing sector get out of control.”
