Bank of America recently shifted to a soft landing forecast from a more negative outlook, and now expects 2% real GDP growth on average, up from 1.5% prior forecast, but Lynn still expects eventual mild recession, suggesting the market and BofA may be underestimating downside risks.

Unemployment has been hovering around 3.6% since December 2022 and was 3.5% as of August 4 (the Friday when the interview occurred), indicating stable historically-low unemployment, which raises the question of whether the Philips Curve applies.