Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
What: US February inflation report
When: 12:30 GMT (13:30 CET)
Expectation: CPI YoY 3.1% vs 3.1% (Jan) and core CPI YoY 3.7% vs 3.9% (Feb)
How will market likely react? If the core inflation rate comes out higher than estimated (upside surprise) then it will likely be seen as really negative as the market is most likely in the downside surprise camp in line with the “soft landing” scenario. A softer or mildly hot print reaffirms US disinflation and soft-landing hopes. Only a very hot print (core CPI above 0.5% MoM) could cause Fed to reconsider its 75bps rate cut bets for this year.
The below shows our views ahead of the US inflation report.