1. What’s a soft landing?
In short, it describes the Fed’s main job these days: Slow the economy enough to curb demand and rein in decades-high inflation, but not so much as to trigger a contraction in gross domestic product and a rise in unemployment. Doing that takes a combination of smart policy making and luck.
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2. Has the Fed ever accomplished this?
Arguably once, in 1994-1995. Under then-Chair Alan Greenspan, the central bank doubled interest rates to 6% and succeeded in slowing economic growth without killing it off. The tighter credit did have adverse consequences, though. It led to huge losses for bond market investors and contributed to the 1994 bankruptcy of Orange County, California. Mexico was also compelled to seek a bailout from the U.S. and the International Monetary Fund.
3. Has every other attempt been a failure?
Not quite. Alan Blinder, who was Fed vice chair for the 1994-95 soft…