The first cut is the easiest

The first cut is the easiest

Key Takeaways

  • So far in 2024, US, UK and European markets have become less optimistic around the timing and scale of rate cuts this year. But things are changing.
  • The European Central Bank has clearly signalled a cut in June.
  • Hopes for a June cut in the UK have revived with inflation set to fall below target in the next few months.
  • Key inflation data in the US has deteriorated of late and we will be watching upcoming employment data closely.
  • With nominal rates on hold, real rates have been rising as inflation falls – central banks should be wary of tighter conditions and move to cut rates.
Transcript
Steven Bell
Chief Economist, EMEA
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