Economic Update June 2024

Has the worst passed?

Resilient global growth and firmer-than-expected inflation prints in recent months have delayed rather than derailed expectations of an ‘immaculate disinflation’. Expectations for deep cuts that drove equity market returns over the first quarter have been replaced by a more positive growth outlook, AI exuberance and robust corporate earnings. Nonetheless, the volatility that characterised markets in April highlights that receding expectations of monetary easing is key to underpinning investor sentiment. While focus remains on the US Federal Reserve, monetary policy is set to become increasingly asynchronous as other central banks seek to manage the idiosyncratic risks in their own economies.