Reported 9 months ago
The US will release the Personal Consumption Expenditures (PCE) price index for June on the 28th, with a slight slowdown in April at 2.65% compared to March's 2.7%. Market estimates suggest a further slowdown in May, while strong US dollar flow towards US assets sacrifices other non-US currency financial markets. Foreign banks analyze that based on economic indicators, labor market indicators, and recent actions by the Federal Reserve, the US has a higher probability of a soft landing in the second half of the year rather than no landing or a hard landing. Standard Chartered Bank predicts a 55% chance of a soft landing, 25% chance of no landing, and 20% chance of a hard landing over the next 12 months, citing factors like decreasing inflation, potential interest rate cuts, reduced labor shortages, stable balance sheets, and boosted household spending from real estate and stock gains. Recent cooling of inflation and labor market trends indicate a continued slowdown, further supported by the unexpected Fed decision in May to slow the pace of asset balance sheet reduction. Expectations point towards a cautious approach by the Federal Reserve towards easing monetary policies to combat persistently high inflation levels and signal potential rate cuts later in the year. HSBC also notes lowered risks for bond yields increasing further, with potential rate cuts coming in the following year.
Source: YAHOO