Did you hear about changes in the digital assets/cryptocurrency realm a week or so ago? The SEC approved the first physical bitcoin exchange-traded funds, or ETFs. Even if you’re not into crypto it’s good to have at least a general understanding of popular investment products, so let’s talk about it.

Now I don’t want to sound overly negative or kid around too much but hearing the term “physical bitcoin” reminds me of learning about oxymorons in grammar school. I remember thinking that pretty ugly seemed funny and illustrated the point. I wonder if kids today would understand how that applies to cryptocurrencies.

Anyway, when I look in my system I now see dozens of different investment funds related primarily or entirely to bitcoin including the 11 physical ETFs just approved by the SEC. These funds are referred to as physical because they track the “spot” price of bitcoin versus tracking futures contracts. The spot price is the price of an investment for immediate delivery and is commonly associated with commodities markets such as gold and silver. I don’t want to hammer you with too much jargon but this physical/spot concept is important to understand if you’re at all interested in buying funds that hold bitcoin.

I phrased my last point purposefully. While I’m sure it’s obvious to you, dear reader, that there is no such thing as physical bitcoin (beyond something commemorative) and that was partly why it was created, investment salespeople would prefer you to think that these physical bitcoin funds offer something fundamentally different from futures-based funds. They even suggest that buying these funds is better than buying and holding bitcoin yourself. And they have a point but I’ll get to that shortly.

You may be familiar with physical gold funds from providers like Sprott. If you want gold exposure in your portfolio you can buy and sell shares of something like ticker symbol PHYS. The fund holds gold bullion and lets you redeem shares for physical gold if you’re interested in doing so and hold a lot of shares. Their website says the redemption has to be equivalent to 400 oz of gold, nearly $810,000 at today’s gold price. That’s unrealistic for most ordinary mortals but knowing that the actual commodity backs their investment is comforting for many investors who buy gold for various reasons other than pure price appreciation. Granted, much of this is personal preference but that shouldn’t be discounted too much. For them, these funds are ideal because they indirectly hold the commodity conveniently within their existing investment accounts.

https://sprott.com/media/1058/phys.pdf

And that convenience factor is more or less the common denominator of the sales pitches from the bitcoin funds.

A good example is the Grayscale Bitcoin Trust (ticker symbol BTC but formerly GBTC). Other companies are in on this now too, such as Blackrock and Fidelity. But the Grayscale fund has been around the longest (incepted in 2013, originally as a private fund based on futures contracts), has the most assets under management (nearly $29 billion) and was one of the funds recently approved by the SEC to start tracking bitcoin’s spot price. Now that it’s an ETF you can buy and sell it within your existing accounts.

https://etfs.grayscale.com/gbtc?gclid=CjwKCAjwq7aGBhADEiwA6uGZp5Bc4HHPGO_Kqsc-pBott-3aQ5ncgM7opx05k40QoT9gB8SpLQPYGxoCdjgQAvD_BwE

Convenience is important but let’s dig a little deeper. The fund costs 1.5% per year while you hold it, about double the typical stock fund in the US but far more expensive than an S&P 500 stock index fund charging maybe 0.1% or less. I compare this to stock index funds because BTC tracks an index, the CoinDesk Bitcoin Price Index, much the same way a stock fund does. Maybe it costs more to manage a huge bitcoin portfolio but shareholders pay that management fee forever. The fund also doesn’t offer redemptions so you can’t swap shares for bitcoin. All you can do if you want out is sell your shares within your brokerage account. That’s straightforward and a reminder that, as I mentioned above, you don’t own bitcoin when you own these funds. Instead, you own shares of a fund that owns bitcoin. You get to participate in bitcoin’s price change, for better or worse, but that’s it. Now, one could say that’s like owning a stock index fund except that stocks represent real companies, many of which pay dividends, and most have long track records. Maybe bitcoin becomes a true currency but until then investing in it is pure speculation.

Maybe participating in bitcoin’s price change is enough for you but a lot of people who are interested in bitcoin also advocate for the democratization of finance, transaction privacy, and getting away from conventional markets. These bitcoin funds are the market.

So if you’re interested in owning bitcoin for any reason other than it’s price, I suggest shying away from bitcoin funds and instead buy and hold bitcoin yourself. You can do so at custodians like Coinbase and, while there’s some hassle there, the bitcoin will be yours and your transaction and holding costs will be a fraction of what you’d pay to the funds over time. Perhaps ironically, Grayscale uses Coinbase to hold its bitcoin so you’d be in good company.

Otherwise, if you’d just like some bitcoin in the overall mix of your portfolio and don’t care as much about the broader themes, these funds are perfect. Just understand what you’re buying and why. Bitcoin’s price is extremely volatile so you could dollar-cost-average into it or plan to buy on a major dip.

Also, it has been interesting to follow how bitcoin funds got to where they are today. Here are two press releases from the SEC about their recent fund approvals. The first is the general release while the second is a dissent from an SEC commissioner having to do with the likelihood for investor confusion and a misunderstanding of the risks of investing in cryptocurrencies in general.

https://www.sec.gov/news/statement/gensler-statement-spot-bitcoin-011023

https://www.sec.gov/news/statement/crenshaw-statement-spot-bitcoin-011023

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Here we are again starting another year that is sure to be full of surprises. 2023 finished up nicely for the markets but now there’s some profit taking going on to start off this year. That’s understandable given recent performance as markets reset a bit for the year ahead. Investors, at least on average, are always looking forward so let’s spend some time on strategies and tactics for 2024. We’ll jump right in with expectations for bonds and plan to do the same for stocks next week.

I usually role my eyes whenever market strategists make annual predictions, but it’s part of their job and I understand that. Very much like weather reports, some market calls end up being accurate while others can be very wrong, but it’s still instructive to pay attention to them. I like to blend multiple predictions to get a feel for what’s expected instead of betting on one super-specific forecast.

One issue this applies to, yet again this year, is the Fed and what it may do to the interest rate environment as it continues to fight inflation. Here are a few predictions representing the current consensus.

JPMorgan expects/suggests (with at least a 1 in 3 chance of happening…) that the Fed cuts rates this year by 2.5%, bringing the short-term target rate it controls down to about 3%. This should help bond returns while also reducing mortgage rates and the cost of financing in general. One interesting thing about their prediction is that it doesn’t require a recession for the Fed to lower rates like this. Instead, it’s suggested that the Fed has room to do so while still being restrictive enough to bring inflation down from about 3% or so currently to the Fed’s 2% target.

Along these same lines Schwab expects rate reductions of about 0.75% from the Fed as a base case. Schwab’s predictions are usually pretty conservative and this one also doesn’t expect a recession but that economic growth and inflation continue to slow at a measured pace. Should we dip into recession Schwab expects that rate reductions could double to 1.5%. (By the way, Schwab’s base case essentially matches the Fed’s own rate prediction. The Fed was totally wrong in 2022 and it can be argued they mismanaged rates in the first place, but they nailed the 2023 forecast… maybe that accuracy continues in 2024?)

And then there’s the bond market’s own predictions. The CME Fedwatch Tool is a moving target representing where investors in the interest rate futures market are putting their money. For some weeks this tool has been showing market expectations similar to the JPMorgan prediction which is more “dovish” then the Fed expects itself to be this year. Bond investors tend to overshoot reality so checking in on this tool periodically is helpful as expectations evolve.

Other predictions abound but the majority are in this same vein. The obvious throughline is investors expect the Fed to cut rates this year by some amount and that any recession should be mild. A lot of this is already priced into the bond market but declining rates would be a welcome change, sort of a tailwind, for bond investors.

So what to do? Maybe you sold bonds back in 2022 or last year and have cash in a money market fund or bank CD that’s been earning 5+%. Funds like Schwab’s Value Advantage Money Market are still at that level but are tied to the short-term rate environment and often hold investments with maturities of 30 days or less. This means there’s a lag in how these funds respond to rate changes but they do respond. Bank CDs usually have rates that are guaranteed until maturity so mark your calendars for the maturity date if you haven’t already. Otherwise, your bank could roll you over into a lower-paying CD for another term. Currently, 1yr CDs are paying around 4.8% and this could drop to what come Spring or Summer? You want the opportunity to make an informed decision so that’s why you need to pay attention.

Assuming you agree with the general sense of these predictions as I do, it’s probably best to start working cash back into core bonds. You can do so incrementally or all at once, but I tend to favor the slow and steady approach as a way to handle uncertainty. Perhaps let declining money market rates or your maturing CDs be a signal for when to add more to bonds.

You can look at Vanguard Total Bond Market (available as a mutual fund or ETF, but I favor the ETF) or the iShares US Aggregate Bond ETF, or similar funds at Schwab, Fidelity, and so forth. These funds hold Treasurys, government agency and corporate bonds that are considered “investment grade” versus “junk”. The funds buy bonds of various maturities but these average to about medium in terms of interest rate risk and where the bond market is generally.

As a reminder, I’m doing all the above on your behalf if I’m managing your portfolio. Otherwise, and as always, feel free to ask questions.

Here are the links I mentioned.

JPMorgan…

https://am.jpmorgan.com/us/en/asset-management/adv/insights/portfolio

Schwab…

https://www.schwab.com/learn/story/fixed-income-outlook-rocky-road-bond-market

The CME Fedwatch Tool…

https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

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Well, here we are and it’s less than three weeks until the start of 2024. This year has flown by. Don’t they all. The markets have thrown us a few curveballs but (knock on wood) the year seems poised to finish out pretty strong, especially when compared to last year.

The outlook is still primarily focused on the Fed and interest rates, and that’s unlikely to change anytime soon. As I mentioned recently, investors are expecting that the economy will continue to slow gradually and that the Fed will start lowering rates as early as March to compensate. In other words it’s a weird dynamic where investors cheer the bad news so long as it’s not too bad because it raises the likelihood that money will get cheaper faster. That’s definitely short-term thinking but is something the stock and bond markets specialize in from time to time.

These assumptions have been baked into market prices and that’s a lot of what’s been driving those prices higher for the last six weeks or so. The Fed meets again this week for their last rate-setting meeting of the year. Essentially nobody is expecting them to change rates now, but as usual much emphasis will be placed on everything Jerome Powell, the Fed Chair, says or seems to say. “Fed Days” are typically volatile, so it’s best to expect that tomorrow and perhaps off and on for what remains of the year.

I’ve recently mentioned the importance of checking your non-retirement accounts again for losses to harvest as we close out the year. Depending on when you bought you may have losses in emerging markets, bonds, and perhaps alternative energy, to name a few.

Additionally, look to the rebalancing process to reallocate money from the winners in your portfolio to your, well, let’s not call them losers but maybe your non-winners. It’s a good time to raise some cash. I’m doing this now for clients who take regular distributions from their portfolio. I generally prefer to have a few months’ worth of spending available in cash and it’s good to have at least some of that in a money market fund or perhaps left in short-term bonds.

Areas to pull profits from might include broad market stock funds, NASDAQ-based funds, or funds that invest primarily in growth stocks. Tech and Communication Services sectors have done very well this year so profits could be taken from there too. Your profits could be added to your bond funds or, assuming you were just rebalancing stock investments, to your “value” oriented large cap funds and perhaps also to your small cap funds. For example, the large cap growth version of the S&P 500 index is up about 26% through yesterday compared to its value counterpart being up about 17%. This, while the value version of the small cap-oriented Russell 2000 index is up 6% or so. That sort of performance mismatch creates a good opportunity for rebalancing.

Rebalancing within asset classes like this can also help increase your portfolio’s cash flow. According to Bespoke Investment Group, stocks in the S&P 500 that don’t pay a dividend (within the “growth” camp already mentioned) are up about 19% this year while stocks in the index that pay the highest dividend yield are up barely 1%. So trim from one, give to the other, and watch the dividend yield/cash flow of your portfolio grow.

Over the next couple of weeks or so I’ll be finishing up RMDs for clients, processing charitable distributions, gifting shares to charities and family, and other items that have to be completed prior to year-end. It’s a seasonal time compression that I’m used to and the main reason I’m pausing these posts until my Quarterly Update in early January.

If we don’t talk before then, I wish Happy Holidays to you and yours. May you get some rest and find rejuvenation while with your friends and family amid this otherwise hectic life.

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Whenever I hear someone ask about market predictions I think about one of the many famous quotes from the Rocky saga. This time it’s from Rocky III, probably my favorite. It’s minutes before Rocky’s big rematch versus Clubber Lang and the villain is asked by a sports reporter for his thoughts on the coming fight. Here’s that eloquent exchange in brief.

Clubber: “Prediction?”

Reporter: “Yes, prediction…”

Clubber: “Pain.”

And then we have the famous prediction of more than 100 years ago from either Henry Poor, a founder of Standard & Poor’s, JD Rockefeller, or JP Morgan himself on what stock prices will do in the coming weeks: “I think they will fluctuate.” Sometimes the best predictions are the simplest.

All kidding aside, I bring this up because predictions can have a lot of biases built into them and it can be hard to see through the clutter. In my industry there’s a lot of financial bias, so to speak, that can make predictions and longer-term forecasts can seem more like product pitches. My favorites are often from the “permabears” who constantly expect the sky to fall. They cherry-pick data to craft compelling stories about impending pain before offering their own complicated and expensive investment products or services as the solution. There are permabulls too, but they don’t seem to get as much airtime as their bearish counterparts. Fear sells, as they say.

I think the goal when looking at market predictions is to get a sense for what reasonable people (very subjective these days, I know…) are expecting the economy and markets to do during the next year so we can plan accordingly. It’s less about which hot stock or precious metals to buy and more about context.

In that vein let’s look at predictions for the stock market this year. We’ll stick with JPMorgan and Schwab and links to more details from each are below.

JPMorgan – Dr. David Kelly, the firm’s Chief Global Strategist is sort of a guru in my industry and frequently holds conference calls for advisory firms. I’ve been following him for years and one of things I like is that he’s a macro guy and doesn’t push products or services. Anyway, he’s someone to pay attention to and here are some tidbits from his (and from others within the firm) 2024 predictions.

2024 = 2% economic growth, 0 recessions, 2% inflation, and unemployment at 4%. This catchy description is what the soft-landing scenario we’ve discussed might look like. JPMorgan expects 2024 to be more volatile than last year but the generally positive economic backdrop is expected to help hold up stock prices even as prices reset to an environment of higher interest rates. A handful of stocks within the S&P 500 are pretty expensive compared to long-term averages while the rest of the index is more reasonably priced. JPMorgan favors large cap stocks this year but suggests buying companies with “resilient profits, solid balance sheets, and favorable relative valuations.” Basically, stay invested but batten down the hatches.

https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/insights/Investment%20Outlook%20for%202024.pdf

Schwab – Liz Ann Sonders, the firm’s Chief Market Strategist, is always worth paying attention to. She and other strategists at Schwab suggest that while a traditional recession in the broader economy is still possible this year, a more likely outcome is a nuanced “rolling recession”, where some sectors struggle while others hold up well enough to average them out. That said, Liz Ann and her team at Schwab do seem a little dour, or perhaps just realistic, about our economy and the markets this year. Factors impacting this could be the declining financial health of consumers that has been showing up in reports lately and the yield curve being inverted for over a year, both of which usually imply recession.

The bond market may have adjusted quickly to the higher interest rate environment, but the stock market still has some catching up to do. Investors may be a little complacent about that, the firm says. Schwab is skeptical about current assumptions for corporate earnings growth and, like JPMorgan, suggests buying the stock of more profitable companies with manageable debt, not just those with huge (anticipated or actual) earnings and/or large debt loads. Diversification is important this year, Liz Ann says, and she emphasizes the importance of “adding low and trimming high” via rebalancing given the runup in portfolio values late last year.

https://www.schwab.com/learn/story/us-outlook-one-thing-leads-to-another

There’s no shortage of other predictions out there but many seem within range of these two. Let me know if you find one that seems interesting.

All in, these two forecasts present a mixed picture while not being overly negative. There’s still a low chance of a major recession but some sectors, perhaps Consumer Discretionary and Technology, could feel some pain assuming the broader economy slows as expected. Stock prices are high but that’s skewed by a handful of popular companies mostly having to do with those two sectors. Fed policy, and potentially unrealistic investor expectations about it, should keep playing a major role in market dynamics this year as well.

To me it’s wise to expect more volatility as investors have these and myriad other issues to contend with. And it being an election year will certainly impact investor psychology. But don’t worry about that too much. According to my research partners at Bespoke Investment Group, since 1928 the fourth year of the presidential cycle has been positive almost 75% of the time with a median return of over 9%. If this year matches that, I’ll take it!

That said, this sort of environment demands detailed portfolio construction and big-picture rebalancing of stocks versus bonds at the allocation level in your portfolio. It’s also important to diversify and rebalance within asset classes and styles (growth versus value) to ensure your portfolio isn’t overweight in potentially overvalued areas. Beyond that, it’s best to reset expectations for this year. Positive, yes, but never easy.

As I mentioned last week, this is happening already on your behalf if I’m managing your investments but I welcome your questions.

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The fourth quarter (Q4) of 2023 was an about face from the first nine months of the year. Just about every asset class was up almost the whole time and investors were optimistic. This, after investors had spent the bulk of the year on recession watch while punishing most stocks and bonds. Expectations about inflation, recession, and the Federal Reserve’s interest rate policies were the crux of market developments for the quarter and year before momentum finally turned positive in a big way during Q4.

Here’s a roundup of how major markets performed during the quarter and for the year, respectively:

• US Large Cap Stocks: up 11.7%, up 26%
• US Small Cap Stocks: up 14%, up 16.6%
• US Core Bonds: up 6.8%, up 5.5%
• Developed Foreign Markets: up 10.5%, up 18.9%
• Emerging Markets: up 7.9%, up 10.3%

Most of the stock market’s 11 sectors limped into Q4 while major indexes leaned on a relative handful of stocks within the Tech, Communication Services, and Consumer Discretionary sectors for performance. AI enthusiasm boosted returns and companies in the S&P 500 like NVIDIA, Meta (Facebook), AMD and Tesla were each up over 100% for the year, far outstripping the index’s return. Much of the rest of the stock market spent most of the year in mixed territory and suffered several demoralizing slumps as the months ticked by. Sectors such as Healthcare, Energy, and Utilities finished the year down a bit. In fact performance and the general environment (multiple wars, bank failures earlier in the year, and lingering concerns about inflation to name a few of the issues present) created enough uncertainty that investors spent much of the year feeling quite bearish about investing.

From about late summer the stock market began another of its downward slides that eroded returns across markets well into October. Indexes with less tech exposure to help hold them up, such as the Dow Jones 30, were pushed into negative territory and the nascent recovery from bonds was smashed. The numerous reasons for this went back to the Fed and what they might do with interest rates.

Investors saw the Fed pause rate increases during the summer but were expecting plans to cut rates. That wasn’t materializing fast enough for investors and the central bank remained hawkish about its willingness to fight inflation. Interest rate sensitive sectors and the bond market saw values suffer as rates continued rising even while the Fed was in pause-mode. The 10yr Treasury, a key benchmark, rose to 5% in late October and that ultimately marked a turning point. Investors began feeling certain that interest rates had risen high enough and that the Fed would start reducing rates early in 2024. This was eventually confirmed, more or less, by the Fed Chair during Q4. Investors cheered this change in direction and bought bonds, sending the same 10yr Treasury yield that had recently been so worrisome back down below 4% as the year closed.

This long-awaited dovish tilt for the Fed sent markets soaring throughout November and December. Almost like flipping a switch investors turned bullish, pushing top performers higher while lifting asset classes and sectors that had been lagging. As you can see from the performance numbers mentioned above, core bonds can thank Q4 for their positive performance and emerging market stocks can too. Another example of the rapid sentiment change came from US small cap stocks which saw their primary index change from a 52-week low to a 52-week high in just 48 days, the shortest timeframe ever according to my research partners at Bespoke Investment group.

One takeaway from Q4 and last year as a whole is that market volatility works both ways. Downside volatility is scary because it can happen fast but prices can rise just as quickly. Bespoke also shared that the turnaround for a typical 60/40 (percentage in stocks and bonds, respectively) asset allocation did well last year but much of that growth occurred during the last two months. That recovery was nearly as fast as coming out of the Covid market lows in 2020. Does anyone think the environment last year was that bad? Regardless, the collective will of investors around the world can change rapidly and has the tendency to create a sense of whiplash and of being left behind.

The outlook is good as we enter 2024. Goldman Sachs publishes an index of financial conditions and, due primarily to the Fed policy shift already mentioned, conditions swung from tight to loose quickly during Q4. In the past that has boded well for markets and the economy a year out and this helps fuel the current positive narrative. But as we know, dominant narratives and investor sentiment can turn on a dime so it’s best, as always, to be cautious. Some analysts suggest that stocks are priced for perfection and that investors could be overly optimistic about Fed rate cuts, so some amount of pullback should be expected even in the context of a continued bull market.

The repeated lesson from all this is to double down on planning, ensure your portfolio makes sense relative to your plans, and then stay the course while making necessary adjustments along the way. Growth will happen but it takes time and demands intestinal fortitude. Nothing is free but staying calm and disciplined while others around you are panicking is as close to a free lunch in the investing world as you’re likely to get.

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Recently a few clients asked about what a soft landing for the economy would look like and how it might show up in the various metrics watched by market prognosticators. Soft landings don’t happen very often and there isn’t even an agreed upon definition for them so it’s natural to wonder about this.

Below I’m including some snippets from a good article on this topic by David Wessel, an economist and journalist formerly of the Wall Street Journal and frequently heard on outlets like NPR.

Of course we won’t know we’ve had one until it’s happened, but if there’s to be a soft landing one place it will show up is in consumer habits, so it’s instructive to look at Holiday spending expectations. Some reports have suggested a major decrease in expected gift buying, but I think it depends on who you ask. For example, the Conference Board surveys people on these topics and noted a difference in spending expectations for those 45 and older, who expect to spend more than their younger cohort when compared to 2022. Maybe part of this depends on who already owned a home before inflation and mortgage rates shot up?

Here's a link to the Conference Board information if you’re interested.

https://www.conference-board.org/press/consumer-holiday-spending-2023

We’ve discussed these metrics before but the following chart from JPMorgan shows the spread between the cost of a mortgage on a home bought now versus existing mortgages. The difference in cost looks huge and it is, but what’s interesting is that according to JPMorgan fewer than 4% of American households bought a home last year. This suggests that the increase in mortgage rates from below 3% a few years ago to over 7% now hasn’t had a direct impact on the financial lives of the overwhelming majority of American homeowners. And since these folks are the ones doing much of the spending in our economy, the wealth effect that comes from rising asset prices coupled with comparatively great mortgage terms helps support this. Now, this consumption is expected to slow into the new year for a variety of reasons, but it’s not expected to crash due to unsustainable debt loads as it did before the Great Financial Crisis, for example.

Okay, now here are the article snippets I mentioned.

When the Federal Reserve is concerned about inflation, it raises interest rates to slow the pace of economic growth. If the Fed raises interest rates a lot, it may cause a recession – known as a hard landing. However, if the Fed can raise interest rates just enough to slow the economy and reduce inflation without causing a recession, it has achieved what is known as a soft landing. But there is no official definition of a soft landing. The National Bureau of Economic Research (NBER), often considered by economists as the quasi-official arbiter of dating recessions, does not define hard or soft landings. Many economists consider a mild recession with a small increase in the unemployment rate as soft – what Fed Chair Jay Powell once described as a “softish” landing.

Soft landings are the equivalent of “Goldilocks’ porridge” for central bankers: following a tightening, the economy is just right – neither too hot (inflationary) nor too cold (in a recession).

The classic example of a soft landing is the monetary tightening conducted under Alan Greenspan in the mid-1990s. In early 1994, the economy was approaching its third year of recovery following the 1990-91 recession. By February 1994, the unemployment rate was falling rapidly, down from 7.8% to 6.6%. CPI inflation sat at 2.8%, and the federal funds rate sat at around 3%. With the economy growing and unemployment shrinking rapidly, the Fed was concerned about a potential pick-up of inflation and decided to raise rates preemptively. During 1994, the Fed raised rates seven times, doubling the federal funds rate from 3% to 6%. It then cut its key interest rate, the federal funds rate, three times in 1995 when it saw the economy softening more than required to keep inflation from rising.

The results were nothing short of spectacular. Alan Blinder, former vice chairman of the Federal Reserve, noted that this was the “perfect soft landing that helped make Alan Greenspan a central banking legend.” Economic performance for the remainder of the decade was strong: Inflation was low and steady, unemployment continued to trend downwards, and real GDP growth averaged above 3 percent per year. Greenspan wrote in his memoirs that “the soft landing of 1995 was one of the Fed’s proudest accomplishments during my tenure.”

That depends entirely on how one defines a “soft landing,” a term for which there is no consensus definition. [Blinder…] says that if GDP declines by less than 1%, or the NBER doesn’t declare a recession after at least a year of a Fed rate-hiking cycle, he considers that a soft landing.

Here's a link to the full article. Check it out if you’re interested because it also includes a table showing pre-Covid recessions back to 1965 and whether the landings were “hard” or “soft”.

https://www.brookings.edu/articles/what-is-a-soft-landing/

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