The UK economy grew a modest 0.2% in January, driven by construction and services. However, it remains in a shallow recession, with overall output falling by 0.3% compared to a year ago. While these figures are slightly better than expected, economists caution that it's too early to say if the recovery is sustainable.
The Federal Reserve should cut interest rates cautiously to avoid instability, says Ken Griffin, CEO of Citadel. Despite some progress, inflation remains high due to ongoing government spending and deglobalization. Griffin believes the Fed will reduce rates slower than expected, likely beginning in the summer.
Jamie Dimon, CEO of JPMorgan Chase, forecasts a recession but anticipates a soft landing, unlike the 2008 crisis. The impact on sectors like commercial real estate and regional banks is expected, but with limited overall damage to the economy. Dimon's caution stems from ongoing quantitative tightening and geopolitical concerns, yet he believes most institutions will endure the challenges effectively.
Federal Reserve Chair Jerome Powell has hinted at the possibility of lowering interest rates in the near future if inflation continues to ease. The Fed is nearing confidence that inflation is approaching their 2% target, and will consider rate cuts to prevent an economic downturn. Market expectations indicate the first cut may occur in June, with a total of 4 cuts anticipated by the end of 2024. However, Powell emphasized that the current policy stance remains appropriate until stronger indications of inflation decline are observed.
