Archive

Russia/Ukraine

• As the war in Ukraine enters its third year, investors should continue to essentially sideline scenarios for the conflict per se and concentrate instead on the implications of increased defence spending in the West in general and Europe in particular.

By Alastair Newton

US CPI Inflation 3.09% y-o-y (consensus 2.9%) in Jan-24

- US CPI inflation rate for January 2024 surpassed expectations by only slowing to 3.09% y-o-y, the lowest growth since June 2023.
- The US Core CPI inflation rate remained at 3.9% y-o-y, also 0.2pp above consensus expectations, reinforcing the hawkish surprise.

US Policy Rate 5.5% (consensus 5.5%) in Jan-24

• The FOMC has maintained the Federal funds target rate at 5.5%, amid solid economic expansion and robust labour market conditions, with a continued focus on navigating elevated inflation towards the 2 percent target.
• Persistent inflation above the target rate underscores the FOMC's cautious stance, maintaining a restrictive monetary policy to ensure inflation moves sustainably towards the 2% goal.
• Future policy adjustments will be guided by a data-driven approach, with the FOMC prepared to respond proactively to emerging risks and economic indicators, emphasizing that a reduction in the target rate range is contingent upon achieving greater confidence in the inflation trajectory moving sustainably towards the Committee's objective.

War In 2024

• Investors have learned to live with the Russia/Ukraine war, the Middle East crisis, and China/Taiwan tensions. However, they still need to beware less high-profile war risks around the world that are consistent with the turbulent times in which we live.

By Alastair Newton