Soft Landing
When a central bank cools inflation with rate hikes without tipping the economy into recession.
In plain English
When a central bank cools inflation with rate hikes without tipping the economy into recession.
A soft landing is the central banker's dream. Rates go up to cool an overheating economy, inflation comes down, and growth slows gently instead of crashing. Like a pilot easing a plane onto the runway.
The opposite, a hard landing, is when the brakes are slammed too hard and the economy skids into recession. Historically, soft landings have been rarer than hard ones, which is why markets argue about them endlessly whenever a hiking cycle ends.
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