February Global Macro Monthly - Policy Rules and Monetary Tools
- 28 February 2024 (10 min read)
Key points
- US growth exceptionalism persists and despite softer retail activity in January there are few signs of the slowdown we continue to expect.
- Activity has softened elsewhere. The Eurozone saw GDP flat in Q4, just avoiding recession, but manufacturing continued to struggle. The UK entered technical recession in Q4 but should rebound in Q1. Japan also fell into recession in H2 2023.
- China weakness weighed on stock market activity but has prompted fiscal and now monetary stimulus. Despite China, broader Asian growth remains solid. This has not been the case for Central and Eastern Europe (CEE) countries.
- Inflation has fallen back globally, but we expect a stickier patch over the coming quarters in developed economies.
- We continue to forecast developed central bank rate cuts from around mid-year. Following a marked repricing, market views now broadly align with our own.
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