One widely held view across investment markets in 2024 is that, when the time comes to cut interest rates, the Fed will move before the ECB. Interestingly, this consensus has been challenged in the last week or so. There are 12 voting members of the Fed’s FOMC and between them they made 20 public appearances over the last two weeks. Much of the accompanying commentary was hawkish in nature and has been accentuated by robust economy data (more info below on the non-farm payroll release). In relation to the US economy: Hard Landing? Soft Landing? Perhaps it will simply be ‘No Landing’. US earnings in the coming weeks will tell us more.


Meanwhile in the eurozone, economic growth has been tepid as GDP growth for 2023 was a meagre 0.5%. Both the IMF and the ECB itself are forecasting growth of sub 1% for 2024. Therefore, the US economy is more robust than in the eurozone, but inflation is also proving ‘stickier’ in the world’s largest economy. The narrative is likely to garner further attention this week, particularly as the ECB meets for its latest rate decision on Thursday.


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