Markets have soared recently, driven by China’s reopening, falling energy prices, and slowing inflation. This has spurred hope among investors of a soft landing, plummeting inflation, and interest rate cuts this year.
However, as the central bank is persistently trying to push inflation down to its target level, interest rates could stay high for a while. Moreover, the weak U.S. retail sales and industrial production revived concerns about recession. Retail sales plummeted 1.1% last month, posting the biggest drop in 12 months, while industrial production fell 0.7% in December, sparking talk of a ‘factory recession.’
