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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
US OUTLOOK/OPINION
BofA writes that the Chinese COVID lockdowns presents some good news but mainly bad news for US inflation and economic growth.
- The main good news is that weaker Chinese demand has kept a lid on oil prices: BofA estimates by a little over 10%. Additionally, the US is not particularly dependent on Chinese consumer/business demand (accounting for less than 1% of Chinese GDP).
- But there is plenty of bad news, mainly from supply-chain disruptions and the resulting inflation. BofA thinks it will take until at least the May CPI data for the full effect of China lockdowns - and they see a "short burst of upward pressure on goods prices.
- That may not impact monetary policy though, with the Fed on autopilot w 50bp hikes in the next 2 meetings. By September (when BofA sees a downshift to a 25bp hiking pace), "any sustained impact of the China lockdowns on US inflation should be clear."
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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