Macroeconomic Picture - May 2022

  • United States: the surge in inflation to a multi-decade high is compressing real incomes and could negatively impact consumer confidence, spending and saving behaviour, as some surveys seem to expect. At the same time, companies’ capex intentions remain high, suggesting that, while US consumption may be decelerating, capex should remain resilient for the first part of the year at least. We expect GDP to move to potential towards yearend while headline inflation is currently peaking and should start to moderate, while remaining well above the Fed’s target for the entire year .
  • Eurozone: the increase in energy and commodity prices continues to weigh on households and businesses as the Ukraine war drags on, putting the recovery of domestic demand on hold and increasing the risks of technical recession in some countries. At the same time, supply-chain disruptions are returning, while risks of gas and energy rationing are exacerbating concerns among producers. Supply and energy-driven inflation will rise further for a few months before starting a progressive deceleration under the assumption of lower energy and commodity prices in the second half of the year.

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