Macro Policy · Core
Soft Landing
A soft landing is disinflation (or a slowdown) without a recession — the hoped-for path off a hike cycle.
Definition
Growth stays positive, unemployment rises only a little, inflation returns to target. It is a path, not a single quarter. 1994–95 is the shrine; most hike cycles do not get the shrine.
Why it matters
Risk assets price the soft landing early and the hard landing late. The word is a positioning object.
Case
1994: hikes, a scare, no recession. 2000 and 2006: the landing was not soft. 2023–24 argued it was happening while lag camp waited.
How to read it
Unemployment, credit, and leading indicators — not the last CPI. A soft landing is a joint hypothesis on lags.
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