U.S. economy suddenly seems on track for fabled soft landing: 2% inflation without a recession

MarketWatch

by Greg Robb

February 14, 2026

AI-Generated Deep Dive Summary

The U.S. economy is showing signs of stability as it moves toward what economists call a "soft landing." This means achieving a steady reduction in inflation to the Federal Reserve’s 2% annual target without triggering a recession. Recent developments suggest that the combination of a resilient labor market and cooling inflation could pave the way for this outcome, even as global geopolitical tensions have subsided. For much of last year, the U.S. economy faced significant headwinds, including rising interest rates implemented by the Federal Reserve to combat high inflation. However, these measures now appear to be working in tandem with a strong labor market, which has kept consumer spending steady and businesses optimistic. This balanced approach is reducing inflationary pressures without causing widespread economic slowdown. This shift is particularly important for investors and businesses,

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Originally published on MarketWatch on 2/14/2026