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Is the “soft landing” happening?
Aurelie Barthere
Key Takeaways
5 min read
  • Labor market data are in line with the “soft landing” scenario in the US, and to a lesser extent in Europe
  • The soft landing scenario is already priced by traditional financial assets: what could derail this pricing would be a reacceleration of inflation (expect ~+ 40bps for headline US CPI for August as energy prices stabilize)
  • Our best-performing risk management indicators are still negative BTC / crypto

“If it looks like a duck, walks like a duck and quacks like a duck, then it just may be a duck”. Is the US economy experiencing the much desired and crypto-bullish “soft landing”?

Labor markets and soft landing

A “soft landing” can be defined as a shallow slow down of nominal growth, mainly driven by slowing inflation, and that is neither associated with real growth falling significantly below zero, nor with a surge of the unemployment rate.

Both the US and Europe labor markets are currently experiencing a slow cooling, characterized by a decrease in vacancies or job openings (US lowest since April 2021), growing labor participation (US highest since March 2020), lower quit rates (US lowest since January 2021), and a very gradual...