US Economic Weekly Update
Our weekly update of the developments and key themes around the US economy
- Based on recent Fedspeak and inflation data, we now believe the Fed is likely to reduce the policy rate by 25bp in June 2024
- We expect the pace of cuts to pick up in September 2024 once a recession is underway
- Our overview highlights the key releases of US economic market data.
US Economic Weekly Key Insights
- CPI data rose strongly for the third consecutive month in March. We expect a 0.276% m-o-m increase in core PCE in March.
- We continue to expect inflation to cool in the months ahead, but the start to 2024 challenges the “immaculate disinflation” narrative that had underpinned the Fed’s dovish pivot.
- Fedspeak since the CPI report suggests officials would prefer to downplay hawkish surprises, but strong inflation data make a June rate cut unlikely.
- We maintain our call that the Fed will cut rates twice this year – at the July and December FOMC meetings. Risks are skewed toward later and fewer cuts.
- Cyclical data this week are likely to be strong — headlined by a rebound in retail sales.
Read our full US Economic Weekly report here.
Contributor
Aichi Amemiya
Senior US Economist
Jeremy Schwartz
Senior US Economist
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