For the past few months, one phrase has been on the mind of investors and policy makers alike: soft landing. With the Federal Reserve raising interest rates at a rapid pace since last spring in an attempt to bring down inflation, the fundamental question has been whether those hikes (and any future ones) will tip the economy into recession or instead slow it enough to cool inflation without sending the economy into reverse.

Objectively, things look pretty good. Inflation seems to be coming under control—the month-on-month inflation rate actually fell a bit in December, while prices for wholesale goods and services tumbled sharply. At the same time, unemployment is at historic lows, and the U.S. economy is still creating a respectable number of jobs. (For all the talk of layoffs, unemployment claims in mid-January were below 200,000.) Wage growth has slowed, and the supply-chain disruptions that helped fuel inflation last year seem mostly to be fixed. The landing strip, in other words, is in sight.

There is, however, an obvious problem with this prospect: the Federal Reserve itself. The Fed’s governors, a number of whom made hawkish comments last week, are still committed to bringing inflation (currently running at 5.7 percent) all the way down to their 2 percent target. And if they follow through on that plan, it’ll be very hard for the American economy to avoid a recession.

[Annie Lowrey: How did tech become America’s most troubled industry?]

What’s odd about this is that there’s nothing special about 2 percent as a target. It’s an arbitrary number whose origins date back to an offhand remark made by a New Zealand central banker named Don Brash in the late 1980s. But over the years, the 2 percent mark has been generally accepted as the definition of price stability. So it has become the inflation target that central bankers in the U.S., Canada, the U.K., Europe, and Japan all shoot for.

To be fair, 2 percent has certain virtues. Central bankers don’t aim for zero inflation, because undershooting can lead to a deflationary spiral and act as a drag on economic growth. In that context, 2 percent has a practical air: not too low and not too high. At an annual 2 percent, prices double every 35 years, which is a long-enough time horizon that no one stresses too much about it. And for most of the past three decades, the Fed was able to keep inflation at or below 2 percent without much trouble.

Now, though, that target, and the Fed’s dedication to it, could have serious consequences both for American workers and for American companies. Although getting inflation down to the 3 percent range doesn’t seem too hard—we may already be on our way—getting it down quickly by an additional percentage point will be challenging. That will likely require the Fed to keep pushing up interest rates, which will in turn squash economic growth, put more people out of work, and increase the odds of a hard landing.

That’s why a surprising number of high-profile figures on Wall Street have started to question the value of the 2 percent target. In December, the influential hedge-fund manager Bill Ackman tweeted that reaching the 2 percent target could not be done without a “deep, job-destroying recession.” Wilmington Trust’s chief investment officer, Tony Roth, argued recently that “3% is the new 2%.” And last week, Morgan Stanley CEO Jim Gorman questioned whether 2 percent was still a realistic goal for the Fed.

That is a good question. The global economy has changed a lot over the past 15 years, since the Great Recession, and even over the past three years of the pandemic. Millions of workers have left the workforce and don’t appear to be coming back. The supply-chain problems of recent years, as well as the rise in tariffs and other trade barriers, have led to more onshoring of jobs and domestic production, which will reduce the deflationary benefits that outsourcing to cheap-labor countries such as China and Vietnam once produced. And the transition to alternative energy may also raise energy costs in the short term.

[Annie Lowrey: The Federal Reserve’s artificial recession]

What all of this means is that driving inflation down to 2 percent may be unrealistic without inflicting a lot of unnecessary pain. And if you’re looking for an inflation rate compatible with strong economic growth, 3 percent may be a more realistic target than 2 percent. There is nothing sacred about 2 percent—the Bank of England, in fact, started its response to the current bout of rising prices with a wide range of acceptable inflation, from 1 to 4 percent, before adjusting its target to 2.5 percent, and then at last falling in line with everyone else on 2 percent. In addition, raising the target to 3 percent would obviously make the Fed’s job easier.

Unfortunately, this is not going to happen. The Fed feels that its credibility is on the line: If it changed its policy now, people might assume that next time around, it would ratchet up its target again. (Former Treasury Secretary Larry Summers made this exact argument last week, saying that abandoning the 2 percent target “would do very substantial damage to credibility,” and could lead to a 1970s-style crisis.) And the Fed is already leery because of criticism that it let inflation get out of control in the first place. When Fed Chair Jerome Powell was asked last month about adjusting the target, he shot down the idea immediately. “Changing our inflation goal is not something we’re thinking about,” he said. “We’re not going to consider that under any circumstances.”

[James Surowiecki: How did they get inflation so wrong?]

That sounds about as definitive as you can get, and it does mean that the odds against a soft landing are higher than they otherwise would be. But there is a little wiggle room here. Although 2 percent is the target, inflation was well below that for plenty of periods in the past. So a period of inflation above it should not be inherently intolerable. More important, even if 2 percent is the target, the Fed faces no absolute requirement on how quickly we get there. So the Fed could raise interest rates a bit more, and then pause to see how that affects the economy, without abandoning the 2 percent goal.

Getting inflation under control is part of the Fed’s job, and it’s an important one. But so, too, is maintaining “maximum employment.” As it navigates the year ahead, the Fed should be balancing those two tasks, rather than obsessively pursuing that 2 percent target at the expense of jobs. Right now you can see a path to a classic soft landing. Let’s hope the Fed doesn’t turn it into a crash instead.

Despite Britain taking a big economic hit and public support for Brexit waning, the latest UK In a Changing Europe (UKICE) report claimed major changes to the UK-EU relationship were unlikely.

Catch up with the most important stories from around Europe and beyond - latest news, breaking news, World, Business, Entertainment, Politics, Culture, Travel.

Avalanche warnings and travel disruption hit parts of Europe as heavy snow falls in Mallorca and parts of Italy, Slovenia, Croatia and Austria.

Catch up with the most important stories from around Europe and beyond - latest news, breaking news, World, Business, Entertainment, Politics, Culture, Travel.

This is an edition of  The Atlantic Daily, a newsletter that guides you through the biggest stories of the day, helps you discover new ideas, and recommends the best in culture. Sign up for it here.

Some NATO nations are wavering about sending tanks and other advanced weapons to Ukraine. I understand fears of escalation, but if Russia wins in Ukraine, the world will lose.

But first, here are three new stories from The Atlantic.

A guide to the possible forthcoming indictments of Donald Trump What really took America to war in Iraq The brutal reality of life in America’s most notorious jail

No Other Choice

I don’t often find myself agreeing with Senator Lindsey Graham, the South Carolina conservative who long ago rebranded himself as Donald Trump’s faithful valet and No. 1 fan. Last week, however, Graham lashed out in frustration at the dithering in Europe and America over sending more weapons to Ukraine. “I am tired of the shit show surrounding who is going to send tanks and when they’re gonna send them,” he said during a press conference in Kyiv, flanked by Democratic Senators Richard Blumenthal of Connecticut and Sheldon Whitehouse of Rhode Island. “World order is at stake. [Vladimir] Putin is trying to rewrite the map of Europe by force of arms.”

Graham is right. Germany, for example, has been reluctant to send Leopard tanks to Ukraine; the Germans, for their part, would likely prefer to see the United States send American tanks first. But everyone in the West should be sending anything the Ukrainians can learn to use, because a lot more than mere order is at stake, and order, by itself, is not enough. As Rousseau wrote, “Tranquility is found also in dungeons,” but that does not make dungeons desirable places to live. Global civilization itself is on the line: the world built after the defeat of the Axis, in which, for all of our faults as nations and peoples, we strive to live in peace and cooperation—and, at the least, to not butcher one another. If Russia’s campaign of terror and other likely war crimes erases Ukraine, it will be a defeat of the first order for every institution of international life, be it the United Nations or the international postal union.

I suspect that many people in Europe and the United States are having a hard time getting their arms around the magnitude of this threat. We are all afflicted by normalcy bias, our inherent resistance to accept that large changes can upend our lives. I struggled with this in the early stages of the war; I thought Ukraine would probably lose quickly, and then when the Russians were repulsed by the heroic Ukrainian defenses, I hoped (in vain) that the fighting would fizzle out, that Putin would try to conserve what was left of his shattered military, and that the world’s institutions, damaged by yet another act of Russian barbarism, would somehow continue to limp along.

We’re long past such possibilities. Putin has made clear that he will soak the ground of East-Central Europe with blood—both of Ukrainians and of his own hapless mobiks, the recently mobilized draftees he’s sending into the military meat grinder—if that’s what it takes to subjugate Kyiv and end the Kremlin’s unexpected and ongoing humiliation. At this point, the fight in Ukraine is not about borders or flags but about what kind of world we’ve built over the past century, and whether that world can sustain itself in the face of limitless brutality. As the Finnish Prime Minister Sanna Marin said in Davos last week: “We don’t know when the war ends, but Ukraine has to win. I don’t see another choice.”

Neither do I, and it’s past time to send Ukraine even more and better weapons. (Or, as my colleague David Frum tweeted last June: “If there’s anything that Ukraine can use in any NATO warehouse from Vancouver to Vilnius, that’s a scandal. Empty every inventory.”) I say all this despite my concerns about escalation to a wider European and even global war. I still oppose direct U.S. and NATO intervention in this fight, and I have taken my share of criticism for that reticence. I do not fear that such measures will instantly provoke World War III. Rather, I reject proposals that I think could increase the odds of an accident or a miscalculation that could bring the superpowers into a nuclear standoff that none of them wants. (Putin, for all his bluster, has no interest in living out his last days eating dry rations in a dark fallout shelter, but that does not mean he is competent at assessing risks.)

Americans and their allies must face how far a Russian victory would extend beyond Ukraine. In a recent discussion with my old friend Andrew Michta (a scholar of European affairs who is now dean at the George C. Marshall European Center for Security Studies, in Germany), he referred to the conflict in Ukraine as a “system-transforming” war, as Russian aggression dissolves the last illusions of a stable European order that were perhaps too quickly embraced in the immediate post–Cold War euphoria. Andrew has always been less sanguine about the post–World War II international order than old-school institutionalists like me, but he has a point: The pessimists after 1991 were right about Russia and its inability to live in peace with its neighbors. If Ukraine loses, dictators elsewhere will draw the lesson that the West has lost its will to defend its friends—and itself.

If Russia finally captures Ukraine by mass murder, torture, and nuclear threats, then everything the world has gained since the defeat of the Axis in 1945 and the end of the Cold War in 1991 will be in mortal peril. Putin will prove to himself and to every dictator on the planet that nothing has changed since Hitler, that lawless nations can achieve their aims by using force at will, by killing and raping innocent people and then literally grinding their ashes into the dirt. This is no longer about Russia’s neo-imperial dreams or Ukraine’s borders: This is a fight for the future of the international system and the safety of us all.

Related:

The brutal alternate world in which the U.S. abandoned Ukraine The bitter truth behind Russia’s looting of Ukrainian art

Today’s News

The first victims of Saturday night’s shooting at a Monterey Park, California, dance hall have been identified. Eleven people were killed and 10 others injured, and the gunman was found dead of a self-inflicted gunshot. President Joe Biden plans to name Jeffrey Zients, his administration’s former COVID-19-response coordinator, as the next White House chief of staff.    The FDA is considering a change to how COVID-19 vaccines are updated. The simpler process would more closely resemble annual flu-shot updates, according to documents the organization posted online.

Dispatches

Up for Debate: Readers weigh in on the pros and cons of corporate diversity training.

Explore all of our newsletters here.

Evening Read

Paul Spella / The Atlantic; Ted S. Warren / Getty; Shutterstock

A Grim New Low for Internet Sleuthing

By Megan Garber

On November 13, 2022, four students from the University of Idaho—Ethan Chapin, Kaylee Goncalves, Xana Kernodle, and Madison Mogen—were found dead in the house that the latter three rented near campus. Each had been stabbed, seemingly in bed. Two other students lived in the house, and were apparently in their rooms that night; they were unharmed.

From the public’s standpoint, the case had few leads at first: an unknown assailant, an unknown motive. Law-enforcement officials in the college town of Moscow, Idaho, initially offered the public little information about the evidence they were gathering in their investigation. Into that void came a frenzy of public speculation—and, soon enough, public accusation. The familiar alchemy set in: The real crime, as the weeks dragged on, became a “true crime”; the murders, as people discussed them and analyzed them and competed to solve them, became a grim form of interactive entertainment.

Read the full article.

More From The Atlantic

The culture wars look different on Wikipedia. Aubrey Plaza gave SNL permission to get weird.

Culture Break

Harrison Ford in "The Fugitive" (Pictorial Press Ltd / Alamy)

Read. “Woman in Labor,” a poem by Daria Serenko.

“Yesterday a woman began giving birth directly on the Red Square with an assault rifle pressed to her temple.”

Watch. Return to a blockbuster that was among the last of its kind. The Fugitive, available to stream on multiple platforms, is the perfect popcorn movie.

Play our daily crossword.

P.S.

I had to do some traveling this weekend, and although I usually connect to airline Wi-Fi and annoy people with random thoughts on Twitter, flying is also a way to catch up on old movies. For some reason, this time out I put on the 1974 classic The Longest Yard, with Burt Reynolds playing a dissolute former football star who ends up in a Florida jail. He is cornered by a sadistic warden (played with genial smarm by the great Eddie Albert) who blackmails him into coaching the prison football team. Reynolds instead suggests tuning up the team of guards by having them play a pickup team composed of inmates, which goes about the way you’d expect. I seemed to recall liking it as a kid, and I wanted to see it again as an adult. (Do not confuse this one with a far-inferior 2005 remake starring Adam Sandler.)

I don’t like sports, and I’m not sure why I thought I would enjoy the movie, but I did, and the reason is that The Longest Yard isn’t really a football movie. It’s a prison movie built around the game between the inmates and guards, a kind of lighthearted Shawshank Redemption about bad men who, for one moment, get a chance to be the good guys. There’s even a murder of an innocent man, as there was in Shawshank, and a similar, if far less dramatic, moment of getting even with the creepy warden. And yes, it includes a message about sportsmanship, as the inmates earn the grudging respect of the guards at the end. Finally, long before it was a joke on The Simpsons, the movie actually gets a laugh by hitting a guy in the groin with a football. Twice.

— Tom

Isabel Fattal contributed to this newsletter.