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According to analysts at ING, a recent run of firm macro data and a robust corporate earnings season have eased fears of heightening Federal Reserve interest rate cuts and a potential US recession.

Key Quotes

“Consumer spending is looking healthy, and there is the growing prospect of a US-China trade deal that can help lift some of the gloom and uncertainty hanging over the global economy. At the same time, the labour market looks resilient and wage growth is on an upward trend while the plunge in mortgage rates is helping to stimulate housing demand and construction spending is accelerating.”

“There are certainly more headwinds this year, but we continue to look for decent GDP growth in 2019 of 2.4%. We also expect inflation pressures to gradually build thanks to rising labour costs and improving corporate pricing power in an environment of firm demand. As such we see little reason for the Fed to cut interest rates this year with the market seemingly moving in our direction given the re-steepening of the yield curve.”