Written by Millan Chauhan

This edition marks almost exactly 12 months since the US banking crisis unfolded, which saw three mid-size banks fail after the mismanagement of their portfolio construction. Since then, we have seen inflation slow down significantly to 3.2%, the S&P 500 hit all-time highs and the Federal Reserve finish their interest rate hiking cycle. Markets have been driven by several themes, which have included greater capital expenditure on semi-conductors and graphic processing units (GPUs), as demand for AI infrastructure increased. There has also been very strong trial results from GLP-1 drugs, which can be used to treat obesity, and markets are excited by the expectations of future interest rate cuts.

Last week, we saw the US Labor Department’s consumer price index in the 12 months to February come in at 3.2%. Core inflation (which removes energy and food) came in slightly above expectations at 3.8%, in the 12 months to February. This was largely due to the higher shelter costs, which include rental costs and house ownership costs which increased by 5.7% in the 12 months to February. The Federal Reserve are due to meet this week to make their interest rate decision, expectations are that the Federal Reserve will keep rates at their current range of between 5.25% and 5.50%.

Elsewhere, there was some positive news that the UK could be recovering from recession, as GDP increased by 0.2% in January. In addition, the UK inflation rate is expected to fall to 3.6% in the 12 months to February, when data is released on Wednesday morning. These are certainly encouraging signs for the UK economy but expectations are that the Bank of England will keep rates steady when they meet this Thursday.


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All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 18th March 2024.

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