However, with war still ravaging through Ukraine and with COVID-19 causing continuous issues in Asia, avoiding an economic downturn will require uncertainty and depend on many factors outside the Federal Reserve's control.
As American families struggle to make ends meet amid surging prices for gas, food and housing, Fed officials have made clear that fighting inflation is their top priority — even if that means inflicting pain.
The Fed will maintain its two-day policy meeting beginning Wednesday, when it is expected to hike the benchmark borrowing rate by another three-quarter of a percentage point in its aggressive campaign to cool demand and ease price pressures.
WATCH: THE AG'S RAN ON "GETTING" TRUMP
Despite a healthy job market with near-record low unemployment, workers are catching their wage gains overwhelmed by consumer prices that rose by a new 40-year high of 9.1 percent in June.
WATCH: THE TIMING OF TRUMP'S TRIAL, WHY NOW?
Slowing the economy is expected to cause more job losses, but policymakers wish to evade at all costs the harsh pain of a price spiral that becomes entrenched or spins out of control.
Treasury Secretary Janet Yellen, herself a former Fed chief, has previously cautioned that such a soft landing will need good luck. On Sunday she stressed again that while "growth is slowing," data does not necssarily point to a recession.
SECURITY IN OVERDRIVE: HOME DEPOT'S UNCONVENTIONAL RESPONSE TO NEW YORK'S CRIME CRISIS
"I'm not saying that we will definitely avoid a recession, but I think there is a path that keeps the labor market strong and brings inflation down," she told NBC.
Former Fed vice chair Donald Kohn told AFP it was a "very complicated, multidimensional issue," especially due to the ongoing supply chain uncertainty.
THREAT OR PROMISE? DEMOCRATIC HOPEFUL'S CONTROVERSIAL MESSAGE: "DIE MAGA DIE"
After flooding the world's largest economy with support during the pandemic — zero interest rates and a steady stream of liquidity into the financial system — Fed policymakers were praising themselves on how fast the economy rebounded, regaining millions of jobs in a matter of months.
WHITE HOUSE WEIGHING GAME-CHANGING SHIFT IN IMMIGRATION POLICY
But they were caught flat-footed by the rapid run-up in prices, as Americans flush with cash due to massive government aid went on a spending spree, buying up cars, houses and other goods at a time when the global supply chain was still bogged down by pandemic lockdowns that continue in China.
TUCKER CARLSON TELLS JOE ROGAN WHAT POLITICIANS ARE SO AFRAID OF TODAY...
The Fed eventually began liftoff — taking the policy interest rate off zero — in March, starting with a 25-basis-point increase, followed by 50 in May and 75 in June.
Higher lending costs make it more expensive to borrow funds to buy cars and homes or expand businesses, which should cool demand, while also making it more attractive to save rather than spend.
Discover alternative ideas that will make you think
Engage in mind bending debate
Earn points, rise in rank, have fun
