Inflation – PCE Deflator YoY Projections The Fed faces challenges in managing a rate cut amid high inflation, requiring a delicate balance between inflation control, price stability, and economic growth to support employment. Image: BofA Global Investment Strategy
Global Economy – GDP Growth Projections Global growth is projected to be 3.1% in 2024 and 3.2% in 2025. These projections highlight the resilience of many economies despite various challenges and uncertainties. Image: International Monetary Fund
Median Policy Rate Projections in the Fed’s Summary of Economic Projections The anticipation of rate cuts in 2024 and beyond is generally viewed as bullish for equity markets, as it signals a potential easing of monetary policy that can support economic growth and stock prices. Image: BofA Global Research
Inflation – U.S. CPI Projections As U.S. inflation is expected to decline, could the Fed be less hawkish in 2023? Image: J.P. Morgan
U.S. GDP, Inflation and Unemployment – FOMC Economic Projections The Fed is forecasting an unemployment rate of 4.6% in 2023. Image: The Daily Shot
U.S. Federal Funds Target Rate: FOMC Projection Stocks tend to underperform in times of tight monetary policy. Image: Alpine Macro
U.S. Headline Inflation Rate Projections With slightly better inflation news, U.S. headline inflation is expected to decline throughout the rest of the year. Image: Pictet Asset Management
European vs. Global Equities Projections European equities are expected to underperform global equities over the next 12 months. Image: BofA Global Research
Fed – Policymaker’s Projections for the Midpoint of U.S. Interest Rates The Fed forecasts first rate hikes in 2023. Image: Financial Times
U.S. Output Gap (Plus Projections) as a Proportion of Potential GDP According to Deutsche Bank, the U.S. output gap is expected to rise above 2%, which tends to lead to higher prices. Image: Deutsche Bank