IHYF - Global Market Perspectives Q3 2024: Losing Some Of The Shine

2024-07-12 10:10:00 ET

Summary

• U.S. growth is softening as lower-income households feel the bite of higher interest rates.
• A first Fed rate cut could occur in September, provided inflation continues to decelerate, and economic activity does not reaccelerate.
• The inflation scare of 1Q24 is now waning, but a few more months of soft inflation data are required to validate that disinflation is proceeding as necessary.

By Seema Shah, Chief Global Strategist, Brian Skocypec, CIMA, Director, Global Insights & Content Strategy, Ben Brandsgard, Insights Strategist

Key themes for 3Q 2024

• There is U.S economic moderation, but cyclical upturns elsewhere.

U.S. growth is softening as lower-income households feel the bite of higher interest rates. Other developed markets are now enjoying cyclical upturns, yet the limited nature of their recoveries suggests that U.S. economic dominance still holds.

• Global inflation tentatively resumes its last mile of deceleration.

The inflation scare of 1Q24 is now waning, but a few more months of soft inflation data are required to validate that disinflation is proceeding as necessary. Without a sharp labor market slowdown, global inflation will unlikely reach central bank targets until late 2025, if not 2026....

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