…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.
US stocks declined through Wednesday after First Republic Bank came under pressure again and concerns over the banking system resurfaced. Regulators subsequently stepped in and yesterday (Monday) it was announced that JP Morgan Chase had taken over the failed bank. Stocks bounced back strongly towards the end of the week and finished Friday on a high with major tech companies inc Microsoft, Alphabet and Meta announcing stronger-than-expected earnings. Apple is reporting this week.
The UK budget deficit grew to £139 billion in the year to March. Although this is the highest on record it is less than forecasted by the Office for Budget Responsibility.
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