UBS analysts reiterate their confidence in a soft landing for the US economy, with inflation on a downward trend and the Federal Reserve poised to cut rates.
“We maintain our view that the US economy is headed for a soft landing,” states UBS. They point to moderating consumer spending as a key factor in bringing down inflation.
Recent economic data has shown some positive surprises, but UBS believes these don’t negate the underlying trend of below-trend growth. “The ISM PMIs appear to confirm that growth has slowed,” they note, referring to the Institute for Supply Management’s purchasing managers indexes.
Consumer demand remains a crucial factor, accoridng to the bank. “The strength of consumer demand will be the main determinant of how the economy develops,” says UBS, noting that, fortunately, softer demand is currently easing inflationary pressures.
While June retail sales and…
