US Federal Reserve Chairman Jerome Powell signals likelihood of rate cuts in June, leading to a global rally in stocks and gold prices hitting a lifetime high. The dovish commentary reflects confidence in the US economy. Analysts remain cautious, taking into account factors such as inflation trends, transient versus permanent effects of the pandemic, and structural shifts in the economy. Personal consumption expenditure figures for February will provide further insights into the Fed’s intentions.
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BofA Global Research predicts that the European Central Bank will raise all three policy rates by 25 basis points at its upcoming meeting, citing a weaker growth outlook and no signs of a peak in core inflation. If the ECB does not hike next week, it could be the last hike of this cycle. BofA Global Research expects the first cut by the ECB in June 2024.
