TYO

Inflation Progress May Be Bumpy, But Is Likely To Continue

Home Market Outlook Economy Analysis Inflation Progress May Be Bumpy, But Is Likely To Continue. Inflation cooled substantially last year, but upside surprises in early 2024 for the US and Europe have many investors concerned. Global central banks seem to be making continued progress. In inflation, inflation is improving in more major economies.

A (Un)Certain Framework

The FOMC has shifted away from specific metrics and adopted a more ambiguous strategy. The Fed has been using a varied set of targets for monetary policy, but the relevance of these data points is questioned. The FomC's outlook for inflation has become increasingly tilted to the upside.

Weekly Market Pulse: Are Higher Interest Rates Good For The Economy?

Interest rates surged last week on the back of a hotter-than-expected inflation report. The rise in rates last week pushed the 10-year to its highest level since the peak at 5% in October of last year. Gold has been setting new highs, trading above $2400.

Rate Cuts Off The Table For Near-Term Outlook: Futures Market

Fed funds futures indicate that interest rate cuts are unlikely in the months ahead. The policy-sensitive US 2-year Treasury yield has downgraded prospects for a near-term rate cut. The implied probability is heavily skewed toward no rate cuts for the next two FOMC meetings in May and June.

U.S. Household Spending Holds Firm

Retail sales beat all expectations. US retail sales rose a very robust 0.7% month-on-month in March versus 0.4% expected. With jobs, inflation, and activity all beating expectations, the Federal Reserve is in no position to cut interest rates. We expect spending and inflation to slow, but the Fed won't be contemplating rate cuts.

Earnings Growth Not Just About Tech

Weekly Report: what happened at TYO last week (0408-0412)?

U.S. Resilience Scuppers The Case For Early Rate Cuts

US economy continues to grow strongly, but inflation is running too high for comfort. Inflation is still higher than the Fed's 2% target. Business surveys suggest the economy is weaker than reported by official data. Ongoing strength means a June rate cut looks unlikely for the U.S.