June 2023 | Markets are pricing in a rosy scenario in which economic deceleration will force the Fed to cut rates in 2023. However, we believe the Fed will stay on hold for 2023 and cut rates only in 2024. Inflation is cooling slowly, and the US economy is cooling down as well. From an equity perspective, we remain concerned about future profits, which leads us to stay defensive on equities and credit. On the fixed income side, we stay constructive on US duration and expect the US yield curve to steepen.
01 | Given uncertainty regarding inflation expectations, the likelihood that Fed will cut rates any time soon is low
02 | The US economy is cooling down GDP is expected to start slowing substantially in Q2 with a contraction seen in the second half of the year. The resilience of the US consumer is the key variable to watch.
03 | We believe markets are too complacent and are ignoring the wall of risks. There are signs of a gaps between fundamentals and excessive valuations in many areas.
Unless otherwise stated, all information contained in this document is from Amundi Asset Management US (Amundi US) and is as of May 27, 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.
