EEUU | United States: volatility will continue, but the easing cycle will start soon

Summary

In recent weeks, high volatility has been observed in financial variables in the United States and, therefore, in much of the world.

Key points

• Key points:
• What explains this volatility? Above all, the high uncertainty regarding the direction that monetary policy may take in the United States.
• When the inflation data for March was released in April, which showed a slight rebound and, above all, that the disinflationary process that had been taking place last year stagnated during the first quarter of this year, the markets assumed that the Federal Reserve (the Fed) would no longer lower rates as sharply as previously thought.
• However, data has subsequently been released that suggests that the economy is slowing, which may lead to the reactivation of the disinflationary process and the Fed starting a cycle of reductions this year.
• The Fed will most likely begin reducing interest rates this year, possibly in September. This measure, which would be well received by the markets, would significantly reduce the possibility of observing a recession later.

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