DFEV - Global Macro Outlook: Second Quarter 2024

2024-04-05 13:15:00 ET

Summary

• The global economic picture did not change significantly in the first quarter of 2024.
• We continue to believe that a soft landing is the most likely outcome, with major economies still on course to avoid significant contractions.
• Should inflation remain more persistent than we expect, it could prove quite disruptive to financial markets, which have been expecting rate cuts over the course of 2024.

The Macro Picture

The global economic picture did not change significantly in the first quarter of 2024. We continue to believe that a soft landing is the most likely outcome, with major economies still on course to avoid significant contractions. Policymakers stand ready to aggressively ease should the growth outlook falter, but so far it hasn’t been necessary.

We nonetheless forecast major central banks to begin cutting rates in the second quarter (2Q) and early third quarter (3Q), not because we expect growth to slow sharply but because we believe that inflation will continue to lose momentum. Of course, this is a key variable to monitor, considering so much rides on further disinflationary progress. Should inflation remain more persistent than we expect, it could prove quite disruptive to financial markets, which have been expecting rate cuts over the course of 2024....

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