A “soft landing” refers to when an economy enters an slowdown but avoids recession. A “soft landing” is the goal of a central bank when it enacts restrictive monetary policy measures (i.e. raising interest rates) to combat inflation.
A “soft landing” occurs when interest rates rise, the economy slows, but a severe downturn is averted and the economy is spared from significant pain. A “soft landing” can be contrasted to a “hard landing” where the economy slows abruptly, causing significant economic damage and sometimes resulting in recession.
