April 2024 - Monthly House Views

Central banks out-of-sync

Recent data from the US have surprised on the upside for both inflation and the economic growth, raising fears the Fed may rethink its rate cuts. Meanwhile, renewed tensions in the Middle East are unnerving already jittery markets. Despite these concerns, we stand by our scenario of positive global growth, albeit with regional disparities, and inflation falling in the world's developed economies. However, we no longer expect the major central banks to cut their rates in sync. What does this mean for investors and how does it impact our asset allocation?