Kristina Hooper, Chief Global Market Strategist at Invesco, stated that the market currently reflects a relatively optimistic macro situation. With the market responding to changes in interest rate prospects, including any bullish or bearish data that emerges in the process, it is expected that the market will experience volatility in the short term. At present, the timing of rate cuts is more important than the exact number of cuts, especially in a situation where market sentiment remains highly volatile. Additionally, there is currently a major risk that some markets are too optimistic, and potential problems have not yet been fully reflected. Given that the growth and inflation rates of various economies in the future may not be the same, it is believed that economic differentiation will become the core theme for the rest of 2024.

In the baseline scenario, demand-side elasticity has delayed the resistance of major Western economies to inflation, particularly in the USA. In the latter half of this year, it is expected that the inflation rates of most economies will continue to decline, and that the inflation rates of developed market economies other than the USA will fall faster, but the expected downward path will only cause a slight cut in interest rates.

As supply and demand factors in developed Western economies gradually become consistent, inflation is expected to continue to decline to the central bank's target level with the encouragement of minor interest rate cuts by major central banks, and gradually return to trend growth levels. The progress of resistance to inflation may be much slower than previously expected, resulting in a weak global economy due to restrictive monetary policies, and forming growth that is below trend but still flexible.

As of now, the impact of monetary policy tightening on the US economy has been relatively small. However, after consecutive unexpected increases in US macro data, related growth seems to be showing signs of weakening. Due to the impact of restrictive monetary policy, the US economic growth rate in the rest of this year may be slightly lower than the trend level. At the same time, inflation may continue to fluctuate downward until the end of the year, and stable inflation above the target level is expected to limit the degree and pace of monetary policy easing. The baseline scenario expects the Federal Reserve to cut interest rates twice this year, possibly starting from the third quarter.