What do the recent US inflation figures mean for Australian investors

April 15, 2024

Recent economic data have continued to indicate subdued growth in the Australian
economy and moderating inflation, and would seem to have kept open the possibility
still of a cut in interest rates by the RBA this year. In contrast, the data in the US have
shown stronger growth and less additional progress on inflation, and have raised doubts
about the scope for the Fed to lower rates a number of times this year as the FOMC has
projected. Though seemingly highly unlikely up until now, it may not even be out of the
question that rates could start to come down as early in Australia as in the US, and with
that possibility, and with the focus in our asset allocation on domestic fixed income,
we maintain our recommended overweight position there, and benchmark position in
equities, notwithstanding the latest signs of more challenges still for the economy and
markets in the US.