Not so many cuts? Investment Clock economic update

I expect just moderate positive global economic growth across most major economies, rather than sustained strong growth. With labour markets still relatively tight, policy is likely to become only gradually less restrictive in the US and in Europe (with Japan going the other way with rate hikes from very low levels).

There are good reasons to expect domestic inflation to moderate further, but data are consistent with a lack of urgency to cut rates. Risks to both activity and inflation forecasts are two-way and elections bring some additional uncertainty. Fiscal policy looks set to remain a differentiator.

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The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.