Our Key Takeaways From the IMF's Spring Meetings

Monday 08 May 2023

Cross Asset

   

Our Key Takeaways From the IMF's Spring Meetings

May 2023 | Investor sentiment is downbeat, but not overly bearish. With tightening credit conditions, our US growth outlook is lower compared to that of the International Monetary Fund (IMF), while we are more optimistic on China. This supports a cautious stance and a search for opportunities across the emerging world. There are some signs of complacency on Europe, while debates were mostly focused on geo-economic fragmentation and the urgency of policy action regarding crisis management and to secure artificial intelligence development.

01 | Our base scenario is largely aligned with the scenario showcased by the International Monetary  Fund (IMF): Inflation should prove stickier and stay above central bank targets for longer.

02 | There was a wide consensus about markets currently pricing in too many Fed rate cuts that confirms our positive view on US duration.

03 | Real bond yields are higher than they were before the pandemic, but are likely to return to pre-COVID levels in the medium term, when inflation returns to major central banks' 2% target.

Crose Asset - Our Key Takeaways From IMF's Spring Meetings

Important Information

Unless otherwise stated, all information contained in this document is from Amundi Asset Management US (Amundi US) and is as of May 08, 2023. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi US and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. Amundi Asset Management US is the US business of the Amundi Asset Management group of companies.

Other news

May 2024 Cross Asset
05/16/2024 Cross Asset

Short-term resilience, but no reacceleration likely in the mid term

We have markedly revised up our forecast for US growth, in particular for H1 2024. We continue to expect GDP growth to decelerate below its potential pace over the next few quarters, before recovering in 2025. Regarding inflation, although the downward trend in core consumer price index inflation has recently stalled, we think that the disinflationary process will continue, albeit along a bumpy road with stickier dynamics. The Fed will still be in a position to pivot towards rate cuts and we expect 75 bps of cuts in 2024 (vs 40 bps by markets) as: (1) monetary policy remains restrictive and will become more restrictive as inflation declines; (2) growth will slow down; and (3) recent inflation data have not altered our year-end projections.

Apr24-Cross Asset
04/22/2024 Cross Asset

A window of opportunity for European equities

After a strong close to 2023 and a resilient first quarter, we expect the US economy to decelerate as we continue through 2024. The most vulnerable segments of the economy are showing signs of stress, although data on the broader economy remain mixed. We continue to expect inflation to moderate amid some volatility, particularly on the sticky services side, as domestic demand cools. We acknowledge the trend strength in risk assets, but high valuations are preventing us from massively shifting our risk gear upwards. The equity rally is broadening and we see a rotation towards European equities, where we have now a neutral stance.

March 2024 Cross Asset
03/15/2024 Cross Asset

Six questions concerning the weakness behind US resiliency

 In January we had some upside surprises, encompassing import prices, producer prices, both the headline and core Consumer Price Index, and the Personal Consumption Expenditure deflator. We think prices were in part boosted by seasonal factors which are not fully accounted for in the usual seasonal adjustment. The weakness in January retail sales and a downward revision of November and December readings signal, in our opinion, a potential downshift in consumer spending. Credit card and auto loan delinquency rates continue to rise according to the New York Fed report; consumption so far has been supported by the depletion of excess savings but US households have also taken on more debt, and some of those loans are becoming delinquent, especially credit card and auto loans, which are now above pre-COVID levels.

Before investing, consider the product's investment objectives, risks, charges and expenses. Contact your financial professional or Amundi US for a prospectus or summary prospectus containing this information. Read it carefully. To obtain a free prospectus or summary prospectus and for information on any Pioneer fund, please download it from our  literature section.

Securities offered through Amundi Distributor US, Inc.
60 State Street, Boston, MA 02109
Underwriter of Pioneer mutual funds, Member   SIPC.   

Not FDIC insured | May lose value | No bank guarantee Amundi Asset Management US, Inc.  Form CRS         Amundi Distributor US, Inc.  Form CRS