Soft Landing? | 23 Febrero 2023

GBPUSD trading plan:

The Fed wants to tighten financial conditions so the economy can smoothly transition from the post-pandemic reopening phase, when the economy grew 5.9% in 2021 and 2.1% in 2022, to a more sustainable rate that neither stokes inflation nor stalls economic growth. A soft landing is when economic growth slows but remains positive as the economy sets up for a long-term sustainable growth path. In contrast, a hard landing means the country falls into recession to break the overheated economic machine. One assumption behind the analogy is an overheated economy is not on a sustainable growth path so policy makers ought to tighten financial conditions to improve the chances the economy can maintain a stable growth rate.

Investment idea: range 1.2000 - 1.2090.