Ron Insana: An economic soft landing has arrived, and here's why it's the Fed's dream scenario.

The Federal Reserve may soon end its rate hikes, as signs of a soft landing are emerging, but we must wait to see if they are truly prepared.

On Friday, interest rates increased due to the November jobs report, which showed 199,000 payrolls added, slightly above expectations, and a modest decrease in the unemployment rate.

Concerns among bond traders center on the possibility that the Fed may need to take additional measures to curb the economy and reduce inflation to its target of 2%.

The market anticipates a potential increase in interest rates, rather than a decrease, due to recent economic and inflationary trends.

Sometimes, the market's initial response to data can be incorrect due to algorithms interpreting a number that slightly deviates from the consensus and triggering an appropriate but momentary reaction.

The machines and possibly the Fed are overlooking the downward revisions to the number of jobs created in August and September, as well as the composition of job gains reported for November.

The data reported on this Friday morning indicates that the Fed does not require another rate hike and the economy is not expanding beyond its capacity.

At the conclusion of the central bank's two-day meeting on Dec. 13, policymakers will reveal their positions.

Returning workers

A significant portion of the recent job gains were due to workers returning from strikes and government job additions. Additionally, a substantial portion of the new payrolls from last month came from hiring in the health-care sector, which has been plagued with chronic underemployment for many years.

Despite being underappreciated by the markets, the surge in worker productivity, which grew at an annual rate of 5.2% in its most recent report, was also accompanied by a modest 1.6% gain in worker compensation.

The closely monitored measure of inflation, core personal consumption expenditures, is increasing at a 2.5% rate over the past six months, which is slightly above the Fed's target. At the same time, energy prices are falling in all forms.

A gradual cooling

The Goldilocks economy, which had returned to its pre-pandemic state, is currently functioning as it was before the pandemic. However, its longevity is uncertain.

The economy is cooling and settling into a sweet spot without the Fed having to do anything more.

Executives from companies such as Amazon, Walmart, and Lululemon are stating that consumers are now more cautious.

The decline in savings and increase in credit card debt, which has reached a record $1.08 trillion, along with rising delinquency rates in both consumer cards and auto loans, indicate a possible recession.

Although some hawkish economists believe that it's necessary to eliminate inflation, doing so may not always be beneficial.

It seems that a moderate economic downturn may occur in 2024 due to the challenges and the significant amount of commercial real estate and multi-family construction debt that needs to be refinanced in the upcoming year.

The increasing refinancing burden, including U.S. government debt, could lead to delinquencies and defaults, potentially causing financial instability that may prompt the Fed to cut interest rates in 2024.

The annual growth rate of the company has slowed down from the previous quarter's torrid 5.2%.

The Atlanta Fed's GDP Now model predicts a 1.2% annual rate of economic growth in the current quarter, which is less inflationary and more sustainable.

The Fed aimed for the economy to slow down, with inflation approaching its target, productivity increasing, and wage rates decreasing.

The central bank's ideal situation is the "soft landing," which is currently a myth.

The Fed should openly declare victory and depart the field.

—CNBC contributor Ron Insana is chief market strategist at Dynasty Financial Partners.