- Evercore founder Roger Altman praised the Fed's handle on the US economy.
- He told CNBC that current conditions are "nearly perfect." Only inflation needs to come down.
- A year ago, Altman warned that rising interest rates could spur a recession.
The Federal Reserve's handling of the economy has one big admirer.
In a Monday-morning appearance on CNBC, Evercore founder Roger Altman praised the Fed for delivering "nearly perfect" economic conditions, citing strength in equities, profits, and employment. Only inflation — which still hovers above the Fed's 2% target rate — is holding off an official soft landing declaration, he said.
"If the landing is finished, and the Fed hits its target, Powell, I think, will deserve an 'A,'" Altman said, referring to the Fed's chairman. "It will be a pretty miraculous achievement."
He doesn't see the completion of the landing taking much longer.
Although there are some concerns rate cuts will reignite inflation, Altman is expecting to see a slowdown this week when new consumption-expenditures data is released.
He also shared his thoughts on the Fed's decision to go with a jumbo rate cut last week.
"I think what essentially happened was that the Fed saw the path on inflation steadily downward as more certain than the path on labor markets, a little more uncertainty about labor markets," Altman said. "So it took a stronger step to fortify labor markets, and went for 50."
Altman's support of the Fed is a bit of an about-face for the bank founder. Last year he was among those warning that tighter interest rates could push the US into recession. Now he's praising the fact that unemployment remains at 4.2%, and cited that the annualized S&P 500 is on track to achieve its best returns since 1960.
Altman joins a growing chorus of economists who have changed their tune on the Fed.
In August, former Treasury Secretary Larry Summers acknowledged that the central bank managed to avoid his worst-case recession forecasts. Its actions have redeemed it after failing to respond to inflation promptly during the pandemic, he said.
