Citi warns “more reasons for caution than optimism” & services inflation stays high

Seeking Alpha (gated) carries comments from Citi analysts. In brief:

Global growth expected to slow down this year, citing:

• “lingering challenges, such as the lagged effects of high rates, and fading momentum in services spending.”

• “Downside risks persist including elevated geopolitical stress and fears over U.S. commercial real estate,”

• “While there are also upside risks such as the potential for a faster than expected recovery in global manufacturing, we continue to see more reasons for caution than optimism.”

On inflation:

• “Even with ongoing conflict in the Red Sea, our supply chain pressure index has been strikingly stable of late and points to goods inflation staying near pre-pandemic levels.”
• However, global services inflation stays high at twice its historical pace
• the labor markets remain tight with wages still well above their 2019 levels

This article was written by Eamonn Sheridan at www.forexlive.com.