A Soft Landing is when a central bank, such as the United States Federal Reserve, tames inflation without triggering a recession.
Central banks seek to accomplish this by reducing the country’s money supply. Common strategies include raising reserve requirements, selling government bonds, and of course hiking interest rates.
Soft Landings can be elusive, though. Economists caution that the U.S. has successfully navigated only one soft landing since World War II. Regardless, many remain optimistic that the Federal Reserve can bring inflation to its 2% target and avoid causing a significant slowdown (recession) in 2024.
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