JP Morgan AM forecasts positive growth in the US and Europe

The JP Morgan AM Strategy Director for Spain and Portugal, Lucía Gutiérrez-Mellado, indicated in a meeting with the media that her baseline scenario for developed economies is one of “discrete but positive growth”, thanks to the strength of the labor market and consumption, so the possibility of recession for the remainder of the semester is diluted.

During the presentation that the manager made of its vision of the market and strategy for the coming quarters, Gutiérrez-Mellado predicted that, in this context, the Federal Reserve (Fed) will undertake one more rise in interest rates, up to the range of 5.25-5.5 %, despite the fact that its members of government have dropped the possibility of two more increases.

For its part, the European Central Bank (ECB) would raise rates with two increases of more than a quarter of a point, up to 4.5 %; and, in both cases, these maximum rates will be maintained for longer than what investors discounted to curb inflation.

The technical recession in the euro area, two quarters of negative growth, the last of last year and the first of this, caused by Germany, is temporary, the board of directors pointed out, since “it is already coming out of recession” and, furthermore, “it has barely been noticed in the markets” due to the strength of the labor market and corporate profits, so there will be growth this year.

The situation can be extrapolated to the United States but with the nuance, highlighted the executive, that it is still early to know the consequences of the regional banking crisis last March, although the authorities reacted well and deposit outflows have stabilized.

In this sense, the expert stressed that in the future, there will be a greater convergence between the regulatory requirements of the big banks and the regional banks after that episode that resulted in the bankruptcy of entities such as Silicon Valley Bank (SVB).

Source: dpa

(Reference image source: Unsplash+)

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