JPMorgan Econ FI-Global Data Watch Touching from a distance, further all the ...-107557055

JPMORGANGlobalEconomicResearch12April2024GlobalDataWatch•High-for-longsoft-landingbalancesoverheatingandmarketstressEconomicandPolicyResearch•ThreestraightstrongUSCPIprintspushesoutpricingofFedcuts•Stickyinflationsufficienttokeepcentralbankscautious;FedamplifiesBruceKasman•Upnext:USMarretailcontrol(0.5%);China1QGDP(6.6%ar)(1-212)834-5515Touchingfromadistance,furtherallthetimebruce.c.kasman@jpmorgan.comTheglobalexpansionhasprovenfarmoreresilientthanmanyhadanticipated.JosephLuptonHowever,hopesforaGoldilockssoft-landingarebeingchallengedbytheaccompanyingstickyinflationthatiscautioningcentralbanksfromstartingtheir(1-212)834-5735easingcyclestoosoon.Ourconvictioninboththesustainabilityofgrowthandinjoseph.p.lupton@jpmorgan.comthestickinessofinflationleadsusthisweektoreconfigureourglobaleconomicscenarioprobabilitytreeandadda“High-for-longsoft-landing”(HFLSL)MichaelSHansonscenario(Figure1).Thischangehastwokeyimplications.First,ratesthatstayhigh-for-longarenolongerasufficientconditionto“boilthefrog”(i.e.,causea(1-212)622-8603recession)—apossibilitywehavelongrecognizedasunderlyingtheinterestmichael.s.hanson@jpmchase.cominsensitivityofmid-cyclefundamentals.AcombinationofstrongfundamentalsJPMorganChaseBankNAandmorepatientcentralbankscouldkeepshort-runneutralratesmuchhigherthanthelong-runrate,yetsustaintheexpansio...