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Investment Weekly

Fed on summer holidays
03 May 2024

    Chart of the week – Fed on summer holidays

    Recent US data have thrown the Fed’s plans to enact a policy pivot off course. The primary problem is sticky inflation, which we expect to return to a downward trend in H2. This year started with seven rate cuts being priced for 2024. We’re at one to two now. Moving to zero may not be a big problem for risk assets if GDP and profits growth hold up. But the longer rates are frozen, the more likely they are to bite the economy and cause financial instability, challenging the ‘soft’ or ‘no landing’ thesis embedded in market pricing.

    Chart of the week – Fed on summer holidays

    More from this week:

    Market Spotlight

    • Emerging trends in ESG

    Lens on…

    • Magnificent earnings – a hard act to repeat?
    • Putting cash to work in fixed income
    • Asia bonds shine

    Download the full report PDF, 3.1MB