A Rare Economic Win
The U.S. economy just pulled off a feat. Markets once saw a 70% chance of a recession this year, but Kalshi now reports that risk has nosedived to 28%. Strong job numbers, easing inflation, and steady consumer spending have sparked hope for a soft landing, where growth cools without collapsing. It feels like a moment to exhale.
Still, this win is fragile. A national debt topping $36 trillion and trade policies that could spike prices cast long shadows. The Federal Reserve’s careful approach, keeping rates at 4.25–4.50% since January, has helped tame inflation to 2.3% in April, the lowest in years. But one wrong move could unravel it all. Will policymakers stay the course?
This isn’t about luck. It’s about choices. The data shows resilience, but sustaining it demands focus. Inflation is down, yet consumer fears of rising costs linger. The path to stability runs through discipline, not complacency.
The Debt Time Bomb
America’s debt crisis grows by the day. At over $36 trillion, the national debt outpaces economic growth. Surveys reveal 85% of Republican and Independent voters worry this burden will drive inflation and higher interest rates. Their concern is grounded. Interest payments now siphon funds from critical priorities like infrastructure or national security.
Some argue for more government spending, citing post-COVID relief as a success. They claim targeted aid or green projects can stabilize growth. History disagrees. Reagan’s 1980s reforms proved that pairing tax cuts with spending restraint fuels prosperity without bloating deficits. Today, the Congressional Budget Office projects debt could cripple the economy by 2035 if left unchecked.
The fix is straightforward. Any tax relief must come with spending cuts or new revenue. Extending unpaid-for tax cuts, as some suggest, echoes the early 2000s, when deficits soared after Bush’s tax reductions. Fiscal responsibility isn’t optional—it’s essential to secure this economic moment.
Consumers Under Pressure
Consumers reflect both hope and strain. The Conference Board’s Consumer Confidence Index climbed to 98 in May 2025, up sharply from 85.7 in April, driven by optimism about jobs and income. Yet, Morning Consult’s Q1 2025 survey paints a grimmer picture: 76% of consumers fret over rising costs, 75% are buying cheaper essentials, and online shopping has dropped 15%.
Trade policies, particularly tariffs, intensify the squeeze. Designed to shield American jobs, tariffs have pushed inflation expectations to 6.5%, eating into real wages. Middle- and lower-income families are rushing to buy durable goods before prices climb further. This isn’t thriving—it’s survival mode.
The 1980s offer a lesson. Volcker’s tough monetary policy crushed inflation, setting up decades of stable prices and rising incomes. The Fed must stay firm, keeping rates tight until core inflation hits 2%. Calls for premature easing, often from interventionist circles, risk repeating the 1970s, when loose policy fueled runaway inflation.
Protecting the Soft Landing
The global stage raises the stakes. The OECD and IMF predict global growth dipping to 2.9% in 2025, with U.S. growth at 1.6%. Trade uncertainty, from tariffs to supply-chain disruptions, is the biggest drag. A U.S. soft landing isn’t just a national goal—it’s a global lifeline. Success depends on smart policy.
Past soft landings, like those in 1967–68, 1984–85, and 1994–95, worked because leaders chose stability over short-term populism. The Fed’s current pause on rate cuts, backed by its commitment to data-driven decisions, mirrors that wisdom. Fiscal conservatism, rooted in voter demands for debt reduction, must guide Congress now.
America has a chance to build on this progress. The plunge in recession odds proves our economy’s strength, but only fiscal discipline will lock in the gains. Over 85% of voters want responsible budgeting. Policymakers must listen, reject reckless spending, and secure a stable future.