How investors learned to live with inflation

Illustration: Satoshi Kambayashi

Jul 21st 2026|4 min read

For a good portion of the early 2020s, just about every discussion of financial markets seemed to involve aviation metaphors. Rich-world inflation had surged and central bankers had belatedly ratcheted up interest rates in an attempt to cool their economies. The big question was whether they could accomplish this without crashing into recession. Overdo the monetary tightening, and productive activity would be squeezed out of the economy along with inflation: a “hard landing”. Those who got it just right would be rewarded with a “soft landing”, in which inflation faded but the economy avoided a downturn. History, alas, showed hard landings to be much more frequent than soft ones.