As the global markets continue to wobble, investors have become increasingly concerned with the possibility of a severeeconomic downturn. However, recent developments suggest that a soft landing is starting to look much more likely.
The term “soft landing” is used to describe a relatively gentle slowdown in the rate of economic growth. It is marked by a moderation in the pace of inflation and unemployment, and the avoidance of recessionary forces. In the past, it has been an effective tool to avoid economic shocks and prevent spills of turmoil in the market.
Recent economic reports from the United States and Europe are increasingly depicting a softer economic landscape. Europe’s manufacturing sector, which initially faltered in the face of COVID-related shutdowns, is now beginning to recover as governments have implemented economic stimulus programs and business reopenings. Similarly, the U.S. economy is showing tracks of stabilization as a result of President Joe Biden’s expansive fiscal stimulus package.
Arthur Goldhammer, a research associate at the Center for European Studies at Harvard University, expressed that it looks like a soft landing is now taking shape. He stated, “It’s clear that what was once feared to be a deep recession so deep it would require massive monetary stimulation in order to ward off a calamity like a Great Depression—that’s not going to happen.”
At the same time, this soft landing is also aided by the availability of a COVID-19 vaccine, with many countries are having approved the availability of novel immunization.
However, not all analysts are optimistic that the global economy is on a pathway to recovery. Dr. Bill Lauderback, an economist with the American Enterprise Institute, notes that the economic data could still be off. He believes there is still a chance that the U.S. economy could stumble at any moment due to the possibility of increasing inflation or a second wave of coronavirus cases.
Nonetheless, the prospect of a soft landing is an increasingly encouraging sign for the global economy. While there is still a risk of renewed economic downturn, recent developments suggest that the worst may be avoided and investors should remain vigilant.
As the global markets continue to wobble, investors have become increasingly concerned with the possibility of a severeeconomic downturn. However, recent developments suggest that a soft landing is starting to look much more likely.
The term “soft landing” is used to describe a relatively gentle slowdown in the rate of economic growth. It is marked by a moderation in the pace of inflation and unemployment, and the avoidance of recessionary forces. In the past, it has been an effective tool to avoid economic shocks and prevent spills of turmoil in the market.
Recent economic reports from the United States and Europe are increasingly depicting a softer economic landscape. Europe’s manufacturing sector, which initially faltered in the face of COVID-related shutdowns, is now beginning to recover as governments have implemented economic stimulus programs and business reopenings. Similarly, the U.S. economy is showing tracks of stabilization as a result of President Joe Biden’s expansive fiscal stimulus package.
Arthur Goldhammer, a research associate at the Center for European Studies at Harvard University, expressed that it looks like a soft landing is now taking shape. He stated, “It’s clear that what was once feared to be a deep recession so deep it would require massive monetary stimulation in order to ward off a calamity like a Great Depression—that’s not going to happen.”
At the same time, this soft landing is also aided by the availability of a COVID-19 vaccine, with many countries are having approved the availability of novel immunization.
However, not all analysts are optimistic that the global economy is on a pathway to recovery. Dr. Bill Lauderback, an economist with the American Enterprise Institute, notes that the economic data could still be off. He believes there is still a chance that the U.S. economy could stumble at any moment due to the possibility of increasing inflation or a second wave of coronavirus cases.
Nonetheless, the prospect of a soft landing is an increasingly encouraging sign for the global economy. While there is still a risk of renewed economic downturn, recent developments suggest that the worst may be avoided and investors should remain vigilant.
