Real Worries About US CPI

"Will mean a Fed that can barely cut this year"

Weekly Thematic Review

Global Head of Desk Strategy John Briggs

As this note goes out in the middle of a two-week trip to Asia, I'll keep it a bit briefer than the usual. I won't bury the lead: there is some real worries in the region that the recent strength in US CPI, reinforced by ongoing resilience in the economy, will mean a Fed that can only barely cut this year – and the view that the skew of risks even around that would be to less cuts than just a couple 25bps rather than more.