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A challenging rate-cut path for central banks
Thursday 08 February 2024
Global Investment Views, Equity, Fixed income
A challenging rate-cut path for central banks
February 2024 | The strength in the US economy keeps us confident that the Federal Reserve will not begin policy cuts before the end of May, and the European Central Bank will also remain vigilant on disinflation. Sluggish growth expectations going forward mean the emphasis on quality credit and valuations will likely increase. Equities markets are continuing to display acute anomalies relative to the historical norm, with high valuation dispersion between growth and value and an extraordinary concentration in the largest securities. We are prioritizing fundamentals, and exploring strong businesses in Japan and US value sectors.
01 | In the US, wage growth is falling and most of the strength in payrolls was in non-cyclical sectors (government, etc). This could affect consumption, which is strong for now.
02 | We do not foresee a recession in the eurozone, but risks are high. Weak government expenditure is likely to weigh on the economy, but personal consumption and wage growth are positives for the region.
03 | Geopolitics/politics are gaining prominence. Half of global population will elect their leaders this year, and global relations will be affected by the choice of leaders.
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Unless otherwise stated, all information contained in this document is from Amundi Asset Management as of February 1, 2024. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the [author] and not necessarily Amundi Asset Management and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product or service. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not indicative of future results. Amundi US is the US business of Amundi Asset Management.
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