The Soft-Landing Illusion – Are We Really in the Clear?

For over two years, the financial world has debated whether the Fed successfully pulled off a soft-landing taming inflation without pushing the economy into a recession.

Now, in 2025, the data presents a mixed picture. On one hand, GDP growth remains positive, unemployment is low, and consumer spending is holding up. On the other hand, inflation is still above target, housing is more unaffordable than ever, and capital markets are grappling with volatility.

So, the real question isn’t just whether we’ve had a soft landing it’s whether we’ve landed at all.

The Hard Truth About the Economy Today

🔹 Inflation is not at 2%. The Fed’s stated goal for a soft landing is getting inflation back to its 2% target. But as of this writing:

• CPI sits at 3%

• Core CPI is at 3.3%

• Core PCE (the Fed’s preferred metric) is at 2.8%

These numbers are not at target, and they are trending up.

🔹 Interest rates remain restrictive. The Fed raised rates by 525 basis points during this cycle the fastest rate hike in history. While they have cut rates slightly (by 100 basis points), they’ve paused further reductions a sign they don’t fully trust that inflation is under control.

🔹 Volatility is back. The stock market has remained elevated, but capital is quietly rotating out of risk-on assets into safer, income-producing alternatives. Treasury yields are fluctuating, and the bond market is signaling caution.

🔹 Consumer debt is climbing. Despite all the headlines about consumer resilience, the reality is that household debt is at record highs. Americans are borrowing more to maintain their lifestyles hardly a sign of financial stability.

If this is a soft landing, then why hasn’t Powell declared victory? Because it’s not over yet.

Wealth Inequality & the Two Americas

The real debate isn’t whether the Fed has pulled off a soft landing it’s about who actually feels like they’ve landed safely.

For institutional investors and high-net-worth individuals, inflation is inconvenient, not catastrophic. A 20% increase in grocery prices barely registers when asset values have appreciated significantly.

But for everyday Americans, the picture is different:

✔ Housing affordability is at a 40-year low. Prices jumped 6.1% last month, and mortgage rates remain above 6% locking millions out of homeownership.

✔ Real wages are being eroded. Even with 4.1% wage growth, inflation has outpaced earnings, reducing real purchasing power.

✔ Household budgets are under stress. The lower 50% of earners are spending more on rent, food, and essentials than ever before.

The top 10% of earners who account for almost half of all consumer spending are still driving the economy. But if their confidence wavers, a real downturn could accelerate.

For accredited investors, this presents both risks and opportunities but it’s crucial to be on the right side of capital flow.

Where Smart Capital is Moving Next

Every major cycle creates winners and losers. The investors who recognize the transition before the masses do are the ones who capture asymmetric returns.

Here’s where smart capital is flowing right now:

✔ Private Credit & Alternative Yield – With banks pulling back on lending, private debt funds are filling the gap. Structured credit, mezzanine financing, and distressed debt are presenting compelling risk-adjusted returns.

✔ Institutional-Grade Real Estate – Multifamily remains resilient, and select commercial asset classes (industrial, data centers, healthcare) are still seeing strong institutional demand. Distressed opportunities will emerge, but capital discipline is key.

✔ Hard Assets as Inflation Hedges – Commodities like gold have doubled in value over the last five years, reflecting the flight to safety. Investors looking to hedge against uncertainty are moving into tangible assets.

✔ AI & The New Productivity Revolution – The AI boom isn’t a speculative bubble it’s a structural shift in productivity. Just as the internet drove the late-90s expansion, AI will fuel the next era of economic growth. The challenge? AI needs infrastructure power, data centers, and connectivity which presents massive investment opportunities.

The Bottom Line: The Next Cycle Has Already Begun

The biggest mistake an investor can make in this environment. Sitting on the sidelines waiting for a crash that never comes.

Markets are in transition not collapse. Capital is rotating not disappearing. Opportunities exist, but only for those who are willing to adjust their strategies.

The question is: Are you positioned for the future or waiting for a past that won’t return?

At NNG Capital Fund, we specialize in alternative investments that perform in every market cycle, real estate-backed debt, and institutional-grade real assets.

✔ Looking for uncorrelated, yield-driven opportunities?

✔ Want to protect capital while positioning for growth?

🔹 Join us at NNG Capital Fund and explore how accredited investors are capitalizing on today’s market dislocations.

📩 DM me or visit NNG Capital Fund to learn more.

Let’s talk strategy.👇 #AlternativeInvestments #PrivateCredit #InstitutionalCapital #MarketTrends