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Soft Landing Bandwagon Welcomes A Big Name As Market Ponders CPI
Call off the soft landing. Larry Summers has joined the bandwagon.
Normally that'd be funny. Sort of. Everyone likes a lazy "famous economist as contrarian indicator" quip. But as he never tires of reminding the world, Summers was right (accidentally or not) on inflation in 2021. I think he was just lucky (or at least more lucky than right), but the fact is, Larry's batting a thousand on his last one macro swings.
Given that, I suppose we're compelled to upgrade already high soft landing odds
So its really consensus now!
It does seem contradictory for both “Soft Landing” and “150bps of cuts” to be consensus simultaneously. That said, I’m just now reminding myself that the market-implied cuts are really a probability-weighting of outcomes. 75bps for soft landing, 225+ for hard.