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FX Talking: Soft Landing, Hard Landing, No Landing?
Financial markets have started the year in rude health. Equity markets are up as much as 9% in Europe and some emerging countries. Narrow spreads are not stopping the huge supply of and demand for private sector bond issuance. And the dollar has continued to fall on the back of lower US rates. The above environment reflects one of a ‘soft landing’, where softening US price pressures allow the Federal Reserve to cut in an orderly manner. This is a far cry from fears of a ‘hard landing’ last October. Back then, it looked like sticky inflation would force central bankers to hike into a recession. And now the ... (full story)