Abating Strength of the US Economy

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The US economy has performed well - certainly better than we expected - amidst an environment of high interest rates and inflation. The lagged effects of interest rate hikes has allowed the jobs market to remain strong and thus propel consumer spending and confidence. However, signs that this growth environment may be slowing could see a change in tide for the US economy.

Key Highlights

• The US economy is starting to experience a sharp slowdown in growth, just 1.4% in Q1 24.
  
• Consumer spending had weakened after a slowing of after-tax incomes.
• Core inflation remains under downward pressure.
• Interest rates likely to be reduced at the next Federal Reserve meeting in September.
• US election likely to cause some short term volatility in markets.
• We remain cautious on US equities as a result.

Read more in our investment perspective article