Global Macro Outlook: Second Quarter 2024

What You Need To Know

An economic soft landing in 2024 remains our base case. Inflation continues to cool, which we think will prompt central banks to follow through on rate cuts by late in the second quarter. Meanwhile, political and policy risks could rise, as over half the world holds key elections in the coming months. 

• The global economic picture didn’t change much since last quarter, and we continue to see a soft landing as the most likely outcome.
• With growth relatively strong, the road back to the Fed’s 2% inflation target has been bumpy, which could continue.
• We still feel that most major central banks will start to ease this year, they just may not begin at the same time.
• On the other hand, the Bank of Japan is completing efforts to ramp inflation back up, and last quarter began to dismantle its yield curve control framework.
• China’s low inflation is a more proximate threat; although we don’t expect a crisis there, we don’t see meaningful pickups in growth or market sentiment either.
• Volatility from political risk tends to have slight economic or financial market impact. This time could be different, of course, so we’ll be monitoring global elections closely.