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Consumer Sentiment Wanes, Boosting Rate Cut Hopes
On March 14, the University of Michigan Survey of Consumers drew interest amid speculation about a US recession. The Michigan Consumer Sentiment Index fell to 57.9 in March, down from 64.7 in February, signaling a possible pullback in consumer spending. A slowdown in consumer spending, which accounts for over 60% of GDP, could raise bets on multiple Fed rate cuts.
However, inflation expectations may complicate the Fed’s policy outlook. The Michigan Inflation Expectations Index climbed to 4.9% in March, up from 4.3% in February.
The CME FedWatch Tool reflected a jump in expectations for a Fed rate cut in June. The probability of a June rate cut increased from 77.1% on March 14 to 83% on March 17.
Asian Market Implications: Friday’s US market relief rally set the tone for the Monday, March 17 session
China’s Economic Indicators Show Mixed Signals
On March 17, China’s economy remained in focus, with housing data, retail sales, industrial production, and unemployment figures drawing interest. Key stats included:
- Retail sales rose 4% year-on-year (YoY) in January and February, up from 3.7% in December.
- Industrial production increased by 5.9% YoY in January and February, down from 6.2% in December.
- China’s House Price Index fell 4.8% YoY in February after declining 5% in January.
- The unemployment rate climbed to 5.4% in February, up from 5.1% in January.
Brian Tycangco, editor/analyst at Stansberry Research, remarked on the housing market trends, stating:
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