Small hikes now and a mild US recession to come

…that’s the consensus view

US GDP slowed to 1.1% in Q1 2023. The US economy is slowing, down from 2.6% Q4 2022. The consensus is for a recession (albeit a mild one) at some point this year.

Illustrating the challenge that the Fed faces in it’s fight with inflation, the PCE Price Index came in at 4.6%, month-on-month, exceeding forecasts. The US central bank is widely expected to hike rates another 0.25% this week. The ECB will also announce this week, and the Bank of England next week. Small hikes are expected from both.

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