⚡ Will Slowing QT and Steady Rates Stabilize Global Markets in 2024?

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MONETARY POLICY SHIFTS

1. Fed's Dovish Stance: The Fed acknowledges no significant progress on inflation reduction this year, hinting at a cautious approach with potential rate cuts favored over hikes.

2. Global Rate Disparities: The European Central Bank (ECB) is expected to cut rates this summer from 4% to 3.25%, contrasting with the Fed’s cautious hold due to sustained inflation above 2%.

3. Quantitative Tightening (QT) Adjustments: The Fed has slowed its balance sheet runoff, reducing monthly QT from $60 billion to $25 billion, to address market liquidity.

ECONOMIC INDICATORS AND MARKET REACTIONS

4. Manufacturing and Employment: U.S. manufacturing index slipped into contraction at 48.6, signaling weak industrial activity; job additions were lower than expected at 175,000 last month, pushing unemployment slightly higher to 3.9%.

5. Market Volatility and Asset Prices: Despite robust inflation, April saw the U.S. dollar strengthen for the fourth consecutive month, reflecting persiste…