Evan Simonoff

Economic narratives keep shifting as the market cycles get longer .

AD GOVERNMENTS AROUND THE WORLD NOT INduced short , sharp recessions in the wake of the Covid-19 pandemic in early 2020 , America might be celebrating the 15th anniversary of the longest economic expansion in its history .

But an expansion characterized by its durability hasn ’ t shown the vibrancy of other long booms like that of the 1990s . Observers like “ finfluencer ” Kyla Scanlon have coined the term “ vibecession ” to describe the post-pandemic economy . And skeptics constantly point to the U . S . federal debt , which has ballooned from about $ 10 trillion in 2009 to $ 35 trillion today .

Economic narratives tend to get whipped around during long cycles , and this one is no different , notes Erik Weisman , chief economist and portfolio manager at MFS Investments . Soft landings conjure up the image of a plane trip that ends only as a passenger awakes in the midst of a super smooth touchdown .

When it comes to economics , however , this image is at odds with reality . Few people remember that the boom of the late 1990s , set up by a soft landing in 1995 , was preceded by a 1994 bear market in bonds — the worst in half a century ( though some consider the 2022 bond market even worse ).

The advent of the internet produced much of the late 1990s ’ growth , and many market participants are counting on artificial intelligence to play a similar role over the next several years . Weisman argues that the current slowdown won ’ t qualify as a soft landing unless the economy sees several more years of expansion after the Fed begins to cut interest rates .

In the last half-century , the mid-1980s and mid-1990s saw the only successful soft landings in the U . S . economy , and neither resembled a perfect touchdown .

SEPTEMBER 2024 | FINANCIAL ADVISOR MAGAZINE | 15