Economy
Soft Landing
Definition
An economic scenario where a central bank raises interest rates enough to slow growth and reduce inflation without triggering a recession.
Explanation
Soft landings are historically rare — most hiking cycles end in recession. The Federal Reserve attempted a soft landing in 2023-2024 after raising rates from 0% to 5.5% to combat post-pandemic inflation. Success depends on precise calibration: tighten too much and you cause recession; too little and inflation persists.