Landings

Olympic events always have favored athletes, but the contests must be completed to know who really was the best at a particular moment.  Lots of money is on the line, especially in America.  To win often means a life of more publicity and even marketing deals.  For surprise winners, they’re happy to have the opportunity to prove themselves.  The Olympics would be boring if we just presumed elite competitors like Simone Biles were the winner and just cut to the medal ceremony.

In the grand economic gymnastics routine, central bankers face the daunting task of executing a soft landing, much like an Olympic gymnast aims for that perfect dismount.  America’s Federal Reserve is like both a coach and a choreographer.  They attempt to calibrate the economy's momentum with precision. Too much stimulus, and the economy risks overshooting, spiraling into inflationary heights; too little, and it may undercut the recovery, leading to a recession. The balance beam they tread is narrow, with market expectations on one side and economic indicators on the other, each capable of swaying the outcome in an instant.

Achieving a soft landing (i.e., a cyclical slowdown that comes to an end without a recession) is akin to sticking the landing after a complex vault.  It requires a blend of agility, foresight, and a touch of good fortune.  The central bank must anticipate the economy's trajectory, adjusting interest rates with the finesse of a gymnast's twist in mid-air.  They must judge the exact moment to tighten or ease monetary policy, all while the ground of global economic and political conditions shifts unpredictably beneath them. The margin for error is slim, and the consequences of a misstep are broadcast for the world to critique, much like the unforgiving slow-motion replays at the Olympics.  Even Simone has errors at that frame rate. 

The final act of this economic performance is the landing itself.  The central bank aims to bring the economy to a steady position (equilibrium), where inflation is under control, and growth is strong enough to allow for full employment.  Anything less risks the jarring impact of a hard landing.   This precise maneuver requires a clear vision of the landing zone.  Like the gymnast's final leap, the central bank leaps, hoping the economy's feet touch down with grace and stability, securing a score that reflects their meticulous preparation and steely nerves.  The crowd, the public and investors alike, holds its breath, waiting to see if the economy will wobble or stand firm.  Should one be accomplished, the soft landing is a testament to the central bank's skill.  Of course, if Jerome Powell and company stick the landing, we might suggest they’ve earned a gold medal, but his should not be confused with a gold standard.