USA: labour market data is likely to cause renewed recession fears in the coming months. Europe: the industrial sector is slowing due to cyclical and some structural problems. China: state support for the struggling real estate sector will remain limited.
Chart of the month
The central banks’ objective in tightening monetary policy from the spring of 2022 was both to contain immediate inflationary pressure and to firmly re-anchor long-term inflation expectations. The latter can be measured by market prices in those countries with outstanding inflation-protected bonds. In the period immediately preceding the Ukraine war, the so-called break-even inflation rate for the next ten years was close to the inflation target of the respective central banks in both the US and France. Following the subsequent surge, inflation expectations have now normalised again.
