Crystal Ball: What global institutions are forecasting for 2024
Wishing all readers, a joyful holiday season and a happy new year. J. P. Morgan: Too early for a victory lap As we head into 2024, a combination of solid activity and falling inflation has seen the market narrative increasingly shift towards the prospects of a soft landing. • We are a little more skeptical . Even though Western economies may be less rate-sensitive than in the past, we expect that the “long and variable lags” of monetary policy transmission are at least part of the better explanation for the economic resilience seen so far. • We think it's too early for the central banks to declare outright victory over inflation, and anticipate that rate cuts in 2024 are unlikely to pre-empt economic weakness. • We therefore think interest rates could be set to fall later than the market currently expects, but eventually they may also fall further...