JP Morgan AM: A cooling economy, but not as quickly as hoped

JP Morgan AM: A cooling economy, but not as quickly as hoped

18 maart 2024

Vooruitzichten
Outlook vooruitzicht (21) recessie crisis

On the surface, last week’s US inflation report was another hot print. Headline inflation increased from 3.1% to 3.2% year on year, and core inflation moderated by less than expected to 3.8%.

While the economy may not be cooling as quickly as hoped, this is unlikely to cause major concerns at the Federal Reserve (Fed). Firstly, a lot of the persistence in inflation remains in shelter, and this should continue to moderate as new tenant rents feed into the CPI calculations. Secondly, although the labour market remains strong there are signs of softening: wage growth is slowing, and the unemployment rate is rising. Taken together, we believe that the Fed remains confident that US inflation is on a gradual path back to target, and therefore continue to anticipate rate cuts beginning in the summer.

18032024 JP Morgan AM

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