The US released the March PPI data last night, and the results were lower than expected both year-on-year and month-on-month. This data can be regarded as a compensation for the CPI data the night before. The lower than expected figure indicates that the rebound in US inflation is limited, especially the inflation growth rate of services and commodities. From the data point of view, it is definitely positive, which can be seen from the collective rebound of US stocks last night. In addition, several Fed officials spoke last night. In summary, it is a foregone conclusion that there will be no interest rate cuts in the near future, but there is a high probability that there will be interest rate cuts this year. Subsequently, the two major investment banks, Bank of America and Deutsche Bank, also gave their latest forecasts. They believe that there will only be one interest rate cut in December this year. Deutsche Bank is more pessimistic, saying that if future inflation data continues to disappoint, or the US election results lead to the emergence of fiscal policies that exacerbate inflation, then the Fed will not cut interest rates this year or in 2025. At present, the situation of various institutions is that Bank of America, Deutsche Bank, and Barclays predict one interest rate cut, and Goldman Sachs predicts two interest rate cuts.
The European Central Bank announced its interest rate decision last night, maintaining the current interest rate, but ECB President Lagarde's speech after the meeting was still very dovish, saying that it would not wait until every inflation item returned to 2% before cutting interest rates. Of course, Powell has said something similar before. I think the key to interest rate cuts, whether in Europe or the United States, depends on inflation data.