Summary
United States: Are We There Yet?
- The March consumer price data dominated the economic discussion this week and are the latest to support that the timing and degree of Fed easing will be later and smaller than many of us previously expected. We’re not yet there. We now expect the FOMC won’t begin to ease policy until its Sept. 18 meeting.
- Next week: Retail Sales (Mon.), Industrial Production (Tue.), Existing Home Sales (Thu.)
International: Major Central Banks Readying Markets for Rate Cuts
- The European Central Bank (ECB) held monetary policy steady this week, though we view the accompanying statement as laying the groundwork for easing in June. We expect the ECB to deliver an initial 25 bps rate cut at its June meeting. The Bank of Canada (BoC) also held steady and said “we are seeing what we need to see” to lower policy interest rates, but that “we need to see it for longer.” We also lean toward an initial 25 bps policy rate cut from the BoC at its June meeting.
- Next week: China GDP (Tue.), Canada CPI (Tue.), U.K. CPI (Wed.)
Interest Rate Watch: No, No, After You
- The not-quite synchronized actions of the world’s central banks came into better focus this week. We explore how that is impacting the rates market in the United States and abroad, particularly as expectations shift in the foreign exchange market.
Credit Market Insights: Consumer Fear of Delinquency on the Rise
- Earlier this week, the New York Fed released its Survey of Consumer Expectations for March. While inflation expectations were largely stable, cracks in household financial well-being were evident in consumers’ responses.
Topic of the Week: Biden Unveils New Plan to Cancel Student Debt
- The Biden administration moved this week to propose new student loan debt relief that would affect millions of Americans. The new proposal would cancel up to $20,000 in debt for borrowers whose balances have grown as a result of unpaid interest. Overall, the macroeconomic impact looks to be muted for the policy, even if the impact could be significant for affected households.
