Coming into land in 2024

By Stephen Bennie

It’s quite a straightforward parallel. When a jet plane takes off, that is when an economy is moving into recovery mode, a return to growth after a recession, so all good. Then when the jet plane is at its 35,000 feet cruising altitude, the economy can be viewed as ticking along nicely and only having to deal with the occasional spot of turbulence. This was pretty much the state of the global economy for most of the past decade following the successful take off post the Global Financial Crisis of 2008. So really nothing more alarming than the occasional “please fasten seat belts, we might have some turbulence ahead” warning for the passengers in the jet plane to deal with.

However, in late 2021 when the US Federal reserve conceded that inflation was not transitory and interest rates were going to have to go up and soon, it was a dramatic change in circumstance. Effectively that was like the captain of the jet plane going onto the overhead speaker and announcing that, “An engine is overheating, please fasten seat belts, and use the oxygen masks that have just dropped down in front of you. We need to make a rapid descent”. And just like that it’s chaos in the cabin for passengers in business, premium economy, cuddle class and the back of the bus. Everyone is abruptly having to process the possibility of a life-threatening emergency landing.

A sight passengers never want to see on a jet plane