Forget the debates about whether this is a “soft landing” or “no landing” scenario. The Fed can start sending a message this week that the economy is healthy and close to the inflation and job targets set by Congress. The Fed needs to lower rates enough to get the housing market moving again. This doesn’t mean huge cuts, but getting back below 5 percent could make possible a lot more purchases and projects.

Ideally, rates would be back under 5 percent by this summer. While Wall Street is salivating at the prospect of even lower rates, Powell could argue that the Fed is at least no longer causing a recession and is merely allowing the economy to move mostly on its own terms.

The truth is, interest rates haven’t been normal in almost 20 years — since before the big 2007-2008 financial crisis. It’s difficult to remember a time when the Fed wasn’t furiously trying to prop up the economy and banking system with ultralow interest rates or, in the past year, trying to squeeze out inflation with high rates. Wall Street and many businesses and consumers had become addicted to “cheap money.” Already, people are eyeing the potential rate cuts as a sign that cheap money is back. Changing that narrative will be hard. But if Powell can get rates back to something close to normal, it could be the greatest achievement of his Fed tenure.

[Let me preface this by saying that Heather Long is one of the most reliable econ reporters and one of the few real assets the Post still has left. With that said, she’s dead wrong here, and all but explains why. The Fed needs to stop playing with its monetary policy and start providing stability and predictability. A Fed rate of 5-5.5% is *normal* and sustainable. Mortgage rates are also at historic norms, or at least the norms established before the Fed and Congress created the housing bubble that popped in 2007-8 and nearly destroyed the financial industry along with it. The housing markets are slow because demand got pushed forward thanks to cheap money and the COVID relief cash that flooded the markets. We don’t need more interventions — we need more normality and less incentive to take on more debt. — Ed]