What is the US economy’s message from the smaller US surveys?
Stickier inflation, a relatively healthy labour market and a barrage of stronger US economic data have forced the market to reconsider its aggressive Fed expectations and to price in only two rate cuts for 2024.
Despite the surging US yields, which make lending more expensive especially for the smaller corporates, US stock indices recorded new all-time highs, partly on the back of the AI craziness that is expected to benefit their accounting bottom lines, as the US economy proves to be ahead of the herd.
However, the recent US CPI report has alarmed the market about the possibility of the Fed not cutting rates this year and thus prompted the current stock market weakness.
Is the US economy strong enough to justify keeping rates unchanged? Putting aside the most popular busin...