Recession or soft landing?

Economists often talk about how the economy as a whole is doing, but it's actually difficult to understand divergent signals and say where we are in the business cycle. We know that inflation is high and to combat this, central banks are raising their lending rates. If consumers then cut back on their spending, businesses find it difficult to pass on price increases and inflation will slowly stabilize. The danger, of course, is that this process could lead to a recession. This week, there were two indicators that described this dynamic: the interest rates on government debt and forward contracts on soft commodities. * The Economics Minute is supported by the NWU Business School.