Weekly Market Commentary - 20th May 2024

This week markets warmly welcomed news that US inflation is falling again. After three months of CPI creeping up, the small decline allowed traders to breathe a little easier, allowed the recent rally in government bonds to continue and added to the equity rally that only a few weeks ago appeared to be running out of steam. Potentially more significant is the slight slowdown in US consumer spending. US consumer demand has remained surprisingly strong in the face of higher rates and rising costs and this spending has helped power US economic growth. Any consistent slowdown would show elevated interest rates are doing their job and help provide the Federal Reserve with confidence to consider cutting.

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