The Fed will lead the economy to a ‘soft to bumpy landing’

Hilton Nassetta CEO Chris Nassetta has spent the past 15 years as CEO of the hotelier experienced several Federal Reserve interest rate cycles.

The longtime leader remains hopeful that the latter β€” aimed at aggressive rate hikes to stamp out 40-year high inflation β€” will lead to a decent landing for the once-too-hot US economy.

“My own opinion is that there is a pretty good chance that we will have a reasonable [economic] landing, which is kind of a soft to bumpy landing with the economy,” Nassetta said Monday at the Yahoo Finance All Markets Summit.

Some business leaders would argue that the Fed has already initiated a hard economic landing as a result of years of ultra-low interest rates.

“Unfortunately, yes [the Fed would be OK with a recession]BMO senior economist Jennifer Lee said on Yahoo Finance Live. β€œAnd the Fed has softened its tone a bit over the past two months. They always said they could probably do this and achieve a softish [economic] to land. But now they have already said that pain will be felt. And it’s unfortunate, but this is what happens when a central bank tightens aggressively.”

The US dollar has appreciated strongly against foreign counterparts, pushing quarterly sales for major multinationals such as Nike (NIKE) and FedEx (FDX) to a head. Mortgage interest rates have risen to almost 7%, reducing the demand for housing. And economic growth – measured by gross domestic product (GDP) – slowed in the first half of the year.

Meanwhile, the Dow Jones Industrial Average (^DJI), S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) remain mired in double-digit percentage declines for the year.

Hilton, for its part, raised its expectations for the full year in January on the back of strong leisure travel and improving corporate demand.

Nassetta still sees a litany of encouraging trends in the company towards 2023, despite rising interest rates.

“I’d say we’re at the beginning of what I think is going to be a new golden age of travel,” Nassetta added.

Brian Sozzi is a great editor and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and further LinkedIn.

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