SOFT LANDING
The term “soft landing” is widely used in economics to describe a cyclical slowdown in economic growth that prevents a recession. When an economy is growing rapidly and there are risks of overheating and high inflation, the central bank may choose to raise interest rates. The aim is to slow economic growth to a more sustainable level without causing a sharp drop in economic activity.
ICP JUST OUT OF THE OVEN AT 9:30
Before the ICP release, the CME FedWatch tool showed that 69% of the market was betting on a 0.25 percentage point (p.p.) cut at next week's meeting. On the other hand, 31% expect a 0.50 p.p. reduction in the current rate of 5.25% to 5.5% annually.
The U.S. Department of Labor released its CPI on Wednesday, closing at 0.2% and heading to 2.5% annually within expectations. Even so, this index is not the Fed's preferred inflation indicator, but it still helps determine where inflation is heading and whether prices are closer to the 2% annual target.