Jurrien Timmer's global macro view – May 6, 2024

Equity gains at the beginning of last week were in thanks to last Friday's weaker-than-expected US jobs report. That, along with a slightly higher unemployment rate, is leading investors to price in two interest rate cuts by the end of 2024, with the hopes of a cut as early as september. So is the rate scare officially over? Joining the show today to share his thoughts on this and more is Fidelity Director of Global Macro Jurrien Timmer. Jurrien speaks to the importance of inflation improvement for the Federal Reserve to consider easing monetary policy and addresses the resilience of the US economy, explaining the relevance of factors such as ample bank reserves and productivity growth, particularly driven by investments in AI. He explains the importance of productivity gains in allowing the economy to grow without generating inflation, which ties into the Fed's policy decisions. He also addresses concerns about the health of the US consumer and the stability of the banking sector following a mini crisis last year, underscoring the importance of distinguishing between temporary liquidity interventions by the Fed and broader quantitative easing measures.

 

As per usual Jurrien will be sharing some charts, so please head to @TimmerFidelity to follow along.

 

Recorded on May 6th, 2024.

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