Rate cuts are finally here. So will we actually hit that vaunted “soft landing” everyone’s been talking about? Well, I’ve got a (contrarian, naturally!) take that I know most people haven’t thought about—especially since last week’s jumbo 50-point rate cut dropped: What if we hit a “no landing” scenario, where the economy ticks along and inflation comes back? I’m bringing up that unpleasant idea because, usually in a rate-hiking cycle like the one that just ended, the central bank pushes the Fed funds rate higher until it breaks something. But this time, it’s not clear it has. In fact, when it looked like it finally had—when Silicon Valley Bank and friends crumbled to dust in March 2023—Jay blinked, and pumped liquidity into the market through the back door, a move we’ve referred to as “Quiet QE” here many times before: The Fed Didn’t Break Anything This Time—That May Be a Problem With that in mind, last week’s oversized cut was understandable: The Fed has been keen to take its foot off the brake for a while now.… Read more