Economic data has shown the continuation of a soft landing: PIMCO's former economist Paul McCulley

Economic Outlook - The most recent data suggests a continuation of a soft landing, which is good news for the economy [2] - The economy was in a good position to absorb the stagflationary shock from tariffs, and the Fed was in a restrictive position [3] - Concerns exist regarding oil prices potentially offsetting disinflation in other parts of the economy [5] Tariffs and Inflation - Evidence of tariffs impacting inflation is present in recent reports, with appliances and commodity goods prices increasing [4] - $70 billion of tariffs have been collected, indicating that someone is bearing the cost [4] - The impact of tariffs on inflation is uncertain, with a divided outlook on whether it will be a one-off event or cause broader inflation [6] Federal Reserve Policy - The Fed is likely to lower rates in the coming months [1] - The Fed should wait and see before cutting rates, despite pressure, to avoid cutting into a bigger inflation problem [6] - The Fed is being cautious, and the downside of waiting is small [7] - Financial markets will likely price in easing before the Fed delivers it if stagnation worsens [8] - The Fed's transparency provides a release valve against being behind the curve, as markets will front-run easing [9]