Economics Weekly: Inflation Data and Rate Cut Outlook Muddy Consumer Sentiment
Global: The Federal Reserve’s narrative to be patient on interest rate cuts has become more bark than bite without the backing of US data. Job Openings and Labor Turnover Survey (JOLTS) job ope...
投資總監辦公室7 Jun 2024
  • Global: Weak US economic data underscore moderating consumer sentiment ahead of next week’s FOMC; ECB cuts rates for the first time in five years
  • China: Property sector woes remain an overhang on China’s economy, but steady policy rate cuts and liquidity injection measures are helping gradually
  • India: Expect policy continuity with the incumbent NDA coalition’s victory in the general elections; 1Q24 real GDP growth rose 7.8% y/y, exceeding expectations
  • Taiwan: 1Q GDP growth accelerated to 6.6% y/y, supported by surge in net exports and steady growth in private consumption
Article image

Global: The Federal Reserve’s narrative to be patient on interest rate cuts has become more bark than bite without the backing of US data. Job Openings and Labor Turnover Survey (JOLTS) job openings fell to 8,059k in April, weaker than the 8,350k consensus, while March’s figure was revised down to 8,355k from 8,488k. The US’ manufacturing sector weakened further in May, with the ISM Manufacturing Index falling from 49.2 in April to 48.7 in May.

PCE and core PCE inflation, the preferred inflation measures of the Fed, stalled at 2.7% y/y and 2.8% in April respectively. On a sequential basis, core PCE moderated from 0.3% m/m to 0.2%. The relatively modest inflation was underpinned by slower personal income growth. This points to a more balanced labour market condition. Against this backdrop, personal spending growth eased from 0.8% to 0.2%.

Last week’s downward revision of 1Q GDP figure (from 1.6% q/q saar to 1.3%) further attests to moderating consumer sentiment. With the US economy moving from exceptional growth towards a soft landing, the Fed will expect inflation to cool in 2H24. At next week’s Federal Open Market Committee (FOMC) meeting on 12 June, Fed Chair Jerome Powell may warn again that the US is on an unsustainable fiscal path arising from its mounting debt.

The European Central Bank (ECB) announced its first interest rate cut since 2019, cutting its deposit rate from a record-high 4% to 3.75%. The ECB cited progress in tackling inflation even as it acknowledged that inflation is likely to stay above target well into next year – core inflation increased to 2.9% in May vs. the consensus for it to stay unchanged at April’s 2.7%. We expect policy to remain restrictive for the rest of the year to get inflation to the 2% target. Meanwhile, other global central banks have aligned with the Fed’s cautious stance to get inflation back to target, by delaying and reducing the number of interest rate cuts this year.

Download the PDF to read the full report which includes coverage on Credit, FX, Rates, and Thematics.



本資訊是由星展銀行集團公司(公司註冊號: 196800306E)(以下簡稱“星展銀行”)發佈僅供參考。其所依據的資訊或意見搜集自據信可靠之來源,但未經星展銀行、其關係企業、關聯公司及聯屬公司(統稱“星展集團”獨立核實,在法律允許的最大範圍內,星展集團針對本資訊的準確性、完整性、時效性或者正確性不作任何聲明或保證(含明示或暗示)。本資訊所含的意見和預期內容可能隨時更改,恕不另行通知。本資訊的發佈和散佈不構成也不意味著星展集團對資訊中出現的任何個人、實體、服務或產品表示任何形式的認可。以往的任何業績、推斷、預測或結果模擬並不必然代表任何投資或證券的未來或可能實現的業績。外匯交易蘊含風險。您應該瞭解外匯匯率的波動可能會給您帶來損失。必要或適當時,您應該徵求自己的獨立的財務、稅務或法律顧問的意見或進行此類獨立調查。





若散佈或使用本資訊違反任何司法轄區或國家/地區的法律或法規,則本資訊不得為任何人或實體在該司法轄區或國家/地區散佈或使用。本資訊由 (a) 星展銀行集團公司在新加坡;(b) 星展銀行(中國)有限公司在中國大陸;(c) 星展銀行(香港)有限責任公司在中國香港[DBS CY1] ;(d) 星展(台灣)商業銀行股份有限公司在台灣;(e) PT DBS Indonesia 在印尼;以及 (f) DBS Bank Ltd, Mumbai Branch 在印度散佈。