Forex Dictionary Terms

Soft Landing

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Definition – What does Soft Landing mean?

Soft landing is a strategy by which the Federal Reserve tries to keep economic growth high enough to avoid recession and low enough to avoid high inflation. It is basically a balancing act between two extremes. The Fed attempts to orchestrate a soft landing by raising or lowering interest rates to slow or spur the economy.

ForexTerms explains Soft Landing

Soft landings may no longer be effective in managing the economy, if they ever truly were. The fact is, the U.S. economy has grown too large and complex to be controlled solely by interest rates. Although the market still reacts to interest rates as if they are the only factor, many corporations have international sources of financing that they can use if domestic lenders’ rates go too high.

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