Fixed Income

Fixed Income Update 02 May 2024

Fikri C. Permana 02 May 2024

Thursday, 2 May 2024

Awaiting Guidance From The Fed

The US economy in 1Q24 expanded 1.6% qoq (Cons: 2.5% qoq, Prev: 3.4% qoq). It was the lowest growth since the contractions in the 1H22. A slowdown was seen for consumer spending (2.5% vs 3.3%), mainly due to a fall in goods consumption (-0.4% vs 3.0%) while spending on services rose faster (4.0% vs 3.4%). Government spending rose way less (1.2% vs 4.6%), and exports slowed sharply (0.9% vs 5.1%) while imports soared (7.2% vs 2.2%).

The robust labor market and the risk of demand-side inflation are still indicated by low initial jobless claims. The PCE price index in Mar ‘24, in the US, edged up to 2.7% YoY (Cons: 2.6% YoY, Prev: 2.5% YoY). Furthermore, prices for services +0.4% MoM and goods +0.1% MoM. Meanwhile, core PCE inflation which excludes food and energy and is preferred Fed inflation measure, was steady 2.8% YoY (Cons: 2.6% YoY, Prev: 2.8% YoY).

The developments of the FOMC meeting on 1 May ‘24, will certainly be the focus of the market, which will also greatly influence the stance of other central banks, global exchange rates, and the global economy. Meanwhile, the anticipation of GDP Growth on 6 May ‘24, will be the primary focus of domestic investors.


KBVS Research Team