Macro Insights Weekly - Implications of a "no-landing" scenario

13 February 2024


  • The markets have resigned to largely pricing out a March rate cut by the US Federal Reserve. We think lingering expectation for a protracted rate cut cycle is still too optimistic.
  • High interest rates and withdrawal of Covid-era support have not yet dented consumption. 
  • Beyond buoyant consumers, US businesses are also reporting brightening outlook.
  • We see gathering upside to our 1.5% US real GDP growth rate forecast for 2024.
  • If growth heads toward 2%, it is hard to see sub-4% long-term bond yield.
  • We still see some rate cuts in 2H24; but if there is no landing, the cycle will be rather short.