Hard Landing
When an economy slows sharply into recession after the central bank tightens policy to fight inflation.
In plain English
When an economy slows sharply into recession after the central bank tightens policy to fight inflation.
Central banks try to slow an overheating economy gently, a 'soft landing'. A hard landing is when it slams into the runway: unemployment jumps and output falls.
Markets often price the odds of each outcome, and currencies react as those odds shift. See also immaculate disinflation, the hoped-for best case.
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