Blooming Not Booming

After having suffered hardships last winter, spring is finally here for the Europeans as both the common currency bloc and the U.K. returned to growth in the first quarter of 2024. Conditions are warmer on the other side of the Atlantic and cooler in the east.

Inflation is now within sight of central bank targets, but sticky service prices amid tight labor markets have prompted caution among monetary policy setters. But we think major central banks are close to the tipping point for easier interest rates.

Major economies are expected to record steady but below-potential growth this year, alongside continued disinflation. Soft landings are still within reach. That said, geopolitical rivalries and political uncertainty have the potential to cause significant turbulence along the way.

Following are our thoughts on how major markets are faring.