Flash Macro: U.S. Inflation

How are we thinking about the March U.S. CPI report?

The latest data confirm our view that markets have been too complacent in expecting the Fed to cut rates quickly. See below for details, but ‘left tail’ risks of low growth and low inflation in the second half of 2024 look increasingly remote, which leaves little incentive for cuts. Against this backdrop, our Regime Change thesis is unfolding even more powerfully than we thought. As such, we are having to make few changes to our forecasts.