Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **US Economic Perspectives** and inflation forecasts, focusing on the **Personal Consumption Expenditures (PCE)** and its components, including housing services, health care services, food services, and other core services. Core Insights and Arguments 1. **Inflation Forecasts**: The overall inflation projection remains uncertain, with risks on both sides of the forecast. The uncertainty surrounding inflation is larger than usual compared to the past 20 to 30 years, although it has decreased from a year or two ago [7][8][11]. 2. **Upside Risks**: - **Tariffs and Immigration Policies**: Proposed tariffs on US imports from China could significantly impact inflation, potentially increasing consumer price levels by up to 155 basis points if implemented fully [8]. - **Strong Economic Growth**: Continued solid growth may keep service price increases elevated, with non-rent services inflation likely to exceed forecasts if wage growth remains high [8]. - **Rents**: There is a possibility that rent increases could be higher than expected, with estimates suggesting a potential monthly increase of 40 to 45 basis points for the next 18 to 24 months [8]. 3. **Downside Risks**: - **Economic Slowdown**: A potential recession could lead to a more significant decline in inflation than anticipated, particularly affecting prices for financial services and travel-related services [9]. - **Weakness in Rent Prices**: If rental increases continue to slow, it could contradict current projections, leading to lower inflation rates [9]. - **Productivity Growth**: An increase in productivity could lead to lower price inflation despite wage growth, similar to trends observed in the late 1990s [9]. - **Natural Rate of Unemployment**: A lower natural rate of unemployment could reduce inflation forecasts by nearly 10 basis points [9]. Important but Overlooked Content 1. **Model Performance**: The Phillips curve models have struggled to predict inflation trends accurately, particularly during the recent inflation surge. The models did not account for changes in demand mix and supply constraints, which were significant drivers of inflation [11][12][13]. 2. **Components of Core PCE Inflation**: - Core goods prices have slowed significantly, with expectations of minimal further disinflation. Core goods inflation is projected to rise slightly by 2026 due to tariffs [24]. - Housing services inflation is expected to slow in the coming quarters, but may rise again as unemployment effects diminish [25][26]. - Health care services inflation is projected to remain stable, influenced by Medicare reimbursement rates [27]. - Food services inflation has slowed considerably, with further moderation expected as wage increases stabilize [28]. - Other core services inflation is also anticipated to slow as wage growth eases [28]. Numerical Data and Projections - **PCE Inflation Projections**: - 2024: 2.5% - 2025: 2.1% - 2026: 2.3% - 2027: 2.0% [35] - **Core PCE Inflation**: - 2024: 2.85% - 2025: 2.27% - 2026: 2.43% - 2027: 2.02% [44] This summary encapsulates the critical insights and projections discussed in the conference call, highlighting the complexities and uncertainties surrounding the US inflation landscape and its components.

Key Points: **1. Global Economic Outlook** * **Trade Tensions**: Trump administration's tariff threats against China, Mexico, and Canada, likely aimed at strengthening negotiating hand. Tariffs on Mexico and Canada unlikely to be implemented, but China could face additional tariffs. * **Inflation Concerns**: Inflation remains a concern, with the US CPI and PCE inflation expected to rise in the coming months. Euro area inflation expected to remain above target, with core inflation steady. * **Central Bank Policy**: US Fed expected to continue gradual rate cuts, with December decision hinges on November payrolls. Euro area ECB expected to cut rates in December, but policy path remains uncertain. * **Global Growth**: Global growth expected to slow in the coming quarters, with risks of further slowdowns due to trade tensions, inflation, and geopolitical uncertainties. **2. US Outlook** * **Tariff Threats**: Trump administration's tariff threats against China, Mexico, and Canada, likely aimed at strengthening negotiating hand. Tariffs on Mexico and Canada unlikely to be implemented, but China could face additional tariffs. * **Inflation Concerns**: Core PCE price inflation firm, with October's core increase of 0.27% m/m (2.8% y/y) similar to September's elevated pace. * **Fed Policy**: FOMC minutes indicate intent to ease gradually as it awaits signals from data and policy. December decision hinges on magnitude of payback effects in next week's jobs report. * **GDP Growth**: Activity poised for some deceleration in the current quarter on the heels of a strong Q3 gain, with consumer spending and equipment investment losing some momentum. **3. Euro Area Outlook** * **Stagnation**: Economic momentum in the euro area remains weak, with signs of softening in the labor market. Inflation remains above target, with core inflation steady. * **France Political Risk**: High risk of the current minority government collapsing due to budget disagreements, potentially leading to political instability and higher deficit. * **ECB Policy**: ECB members have shown diverging views on the next policy steps, with some advocating for gradual approach and others suggesting retaining flexibility regarding the size of the December cut. **4. UK Outlook** * **Resilient Money and Credit Growth**: Money and credit data were resilient going into the October budget, with whole economy M4ex IOFCs (broad money) growing 4.0% 3m/3m-annualised in October. * **Immigration**: Updated data show immigration was higher than previously thought, but is now falling. * **BoE Policy**: BoE began the conversation on its response to the Bernanke Review, while the fiscal policy focus centres on the choreography of next steps. **5. Japan Outlook** * **Wage Hike Expectations**: Expect a large wage hike again in FY25 and a base pay increase consistent with the new equilibrium sought by the BoJ, reflecting labor shortage perceptions, earnings, and inflation expectations. * **CPI Data**: CPI data remain firm and the services PPI suggests pass-through of labor costs is in the pipeline. * **BoJ Policy**: BoJ expected to continue its easing cycle, with further rate cuts expected in the coming months. **6. China Outlook** * **Tariff Threats**: Trump's threat to impose additional 10% tariffs is likely a negotiating tactic, but could mark the start of a stream of tariffs ahead. * **Policy Response**: Expected China to respond with more fiscal support, though there could be a lag before the next policy announcements. * **Economic Recovery**: Early signs of recovery in October following stepped-up counter-cyclical policy support, but the recovery remains timid and fragile. **7. Emerging Asia Outlook** * **Central Bank Easing**: Bank of Korea (BoK) delivered an out-of-consensus – but in line with our forecast – 25bp cut. Now expect another BoK cut in Feb 2025. See the Monetary Authority of Singapore (MAS) easing in Jan 25, and Reserve Bank of India (RBI) on hold in Dec 24. * **Inflation Concerns**: Inflation remains a concern, with core inflation expected to remain above target in the coming months. **8. Emerging Europe, Middle East and Africa Outlook** * **Geopolitical Risks**: Focus has shifted to Gaza, Iran, and Israeli domestic politics, with ongoing tensions and risks of renewed conflict. * **Central Bank Policy**: BoI stayed on hold, while the NBK hiked by 100bp, intervening in the market amid significant FX pressure. **9. Latin America Outlook** * **Trade Tensions**: Explore the possible implications for LatAm economies via four potential channels: trade, global financial conditions, remittances, and diplomacy. * **Mexico**: Believe the Trump administration will not impose specific tariffs on Mexico, as supply chains are highly integrated and Sheinbaum's incentives are aligned to Trump's. * **Argentina**: Milei's special relationship with Trump could facilitate negotiations with the IMF around a new program with net financing. * **Venezuela**: Trump's first key appointments signal potential for a harder, rather than a softer, stance towards the Maduro regime.

更多资料加入知识星球：水木调研纪要 关注公众号：水木纪要 Global Economic Outlook Summary North America Economic Research 22 November 2024 J P M O R G A N Carlton Strong (1-212) 834-5612 carlton.m.strong@jpmorgan.com JPMorgan Chase Bank NA Joseph Lupton (1-212) 834-5735 joseph.p.lupton@jpmorgan.com | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-----------------------|------------|-----------------------------------|-----------|-----------|--------------|------------------------------------------ ...

J P M O R G A N Global Economic Research 19 November 2024 Correction (first published 18 November 2024) (See disclosures for details) In a sentimental mood 2025 Global Economic Outlook • The global expansion remained resilient this year with elevated inflation limiting central banks' room to ease. These developments aligned with our forecast, but GDP growth proved stronger and more divergent than expected. • Robust US outperformance and global manufacturing weakness (outside tech) was a surprise. The contra ...

Summary of the 2025 US Economic Outlook Conference Call Industry Overview - The report focuses on the US economy and its outlook for 2025, highlighting potential paths influenced by political changes and economic policies [2][6][9]. Core Economic Points - **Growth Projections**: The US economy is expected to experience a mild downshift in growth to 2% in 2025, with a slight increase in the unemployment rate to 4.5% [2][6]. - **Inflation Expectations**: Core PCE inflation is projected to decelerate to 2.3% in 2025, down from previous highs [2][6]. - **Federal Reserve Actions**: Anticipated rate cuts by the Federal Reserve include a 25 basis point cut in December 2024 and an additional 75 basis points by the end of Q3 2025, stabilizing at 3.75% [2][6]. - **Labor Market Dynamics**: Labor supply growth is expected to slow, with breakeven payroll growth falling below 100,000 by 2026, while labor demand moderates without triggering a recession [2][6][9]. Economic Risks and Uncertainties - **Policy Uncertainty**: The incoming administration's policies on immigration and trade could significantly impact economic growth and inflation, with potential tariffs on China expected to add 0.2 percentage points to core inflation [10][11][32]. - **Higher Deficits**: A projected federal fiscal deficit of around 7% of GDP in 2026 is anticipated, influenced by the expiration of personal tax components of the TCJA [11][12]. Labor Market Insights - **Unemployment Trends**: The unemployment rate is expected to peak at around 4.5% in the first half of 2025 before improving back to 4.2% by year-end [34][38]. - **Job Growth**: Nonfarm payroll growth has cooled to just over 150,000, with a significant decline in job openings, indicating a balanced labor market [34][38]. Consumer Spending and Income - **Consumer Spending Growth**: Real consumer spending is projected to slow to around 2% in 2025, influenced by changes in disposable income and the saving rate [46][49]. - **Wage Growth**: Compensation growth is expected to moderate, with real labor income increasing by 2-2.5% [46][49]. Housing Market Dynamics - **Residential Investment**: Real residential investment is projected to rise by 3% in 2025, driven by new home sales and construction despite challenges in existing home sales [60][61]. - **Household Growth**: The adult population is expected to grow by approximately 3.8 million per year, with household growth estimates ranging from 0.9 million to 1.2 million annually [63][64]. Corporate Profit Outlook - **Profit Margins**: Domestic corporate profit margins are near record levels, with pretax profits expected to rise by 5-6% in 2025, although this represents a slowdown from previous growth rates [71][73]. - **Investment Trends**: Despite high profit margins, business investment spending remains low, with businesses acting as net lenders rather than borrowers [77]. Conclusion - The economic outlook for 2025 presents a complex interplay of growth, inflation, and policy uncertainties, with significant implications for various sectors including labor, consumer spending, housing, and corporate profits [2][6][11][12].

Industry Overview * **Industrial Production**: Industrial production fell 0.3% MoM in October, slightly stronger than consensus expectations at -0.4%. The largest subset of manufacturing production declined 0.5% MoM. * **Temporary Factors**: The Federal Reserve indicated a 0.3pp drag from strikes and hurricanes during the month. These factors should rebound and boost IP in November. * **Underlying Trend**: The underlying trend of manufacturing activity remains subdued even without these temporary factors. * **Near-term Outlook**: The near-term outlook remains unclear. There could be some boost to activity from lifting of post-election uncertainty, but recently rising yields could weigh further on this ratesensitive sector. * **Survey Data**: Citi will be watching survey data like ISM manufacturing for any change in the outlook for still-soft underlying activity. Key Points * **Industrial Production**: Industrial production fell 0.3% MoM in October, slightly stronger than consensus expectations at -0.4% and Citi at -0.7% [6]. * **Temporary Factors**: The Federal Reserve indicated a 0.3pp drag from strikes and hurricanes during the month. These factors should rebound and boost IP in November [1]. * **Underlying Trend**: The underlying trend of manufacturing activity remains subdued even without these temporary factors [1]. * **Near-term Outlook**: The near-term outlook remains unclear. There could be some boost to activity from lifting of post-election uncertainty, but recently rising yields could weigh further on this ratesensitive sector [1]. * **Survey Data**: Citi will be watching survey data like ISM manufacturing for any change in the outlook for still-soft underlying activity [1].

Industry/Company Involved * **Industry**: Global Economics, specifically focusing on the impact of tariffs and trade policies. * **Company**: Not explicitly mentioned, but the analysis is based on simulations and models developed by Citi Research. Core Points and Arguments 1. **Tariff Increase Simulation**: The report simulates a 10pp increase in tariffs on US imports from major trading partners (Canada, China, Japan, Mexico, Taiwan, South Korea, the UK, and the EU) and an equivalent retaliation by these countries. * **Impact**: Sustained output loss in the US and elsewhere, with a peak loss in US output of around 1.5%. * **Reasons**: The US is both the origin and target of multiple shocks, while other trading partners only see their bilateral trading relationship with the US affected. 2. **Global Economic Impact**: The output loss in the rest of the world is persistent, though less pronounced, with a gap to the baseline scenario converging to around 0.6%. * **Reasons**: A slow grind towards a new equilibrium rather than a sudden shock followed by an incomplete recovery. 3. **Trade Growth and Global Integration**: The results suggest a longer-lasting loss in trade growth and a less integrated global economy for several years after the shock. * **Impact**: Global trade growth remains slow, and global integration (proxied by the ratio of trade to GDP) will decline for a while. 4. **US Trade Balance**: Despite a more noticeable and more permanent US real exchange rate appreciation in the unilateral tariff scenario, the US trade balance (as a share of GDP) improves by more in the current scenario with retaliation. * **Reasons**: Weakened demand from the US in the scenario with retaliation. Other Important Points * **Policy Rates**: US policy rates stay lower than in the baseline as a result of weaker (core) inflation of around 0.2pp in magnitude. * **Central Bank Reaction**: Central bank reaction functions show policy rates converging to a lower steady state, at least in some cases enabled by lower inflationary pressures. * **Limitations**: The model only allows tariff simulation for a specific set of countries, which account for 77% of US imports.

更多资料加入知识星球：水木调研纪要 关注公众号：水木纪要 更多一手调研纪要和海外投行报告加V：shuinu9870 04 Nov 2024 10:58:42 ET │ 15 pages US Economics Inflation Weekly – Wage pressures returning to normal CITI'S TAKE Core PCE inflation rose 0.25%MoM in September, a bit stronger than the 0.21% increase we had been expecting but with Q3 inflation still rising close to target with a 2.16%QoQ annualized increase. Core inflation could remain volatile month to month, with some upside risk in October from components like medical and financial services. But h ...

30 Oct 2024 21:36:38 ET │ 10 pages Japan Economics DPP tax cuts could be adopted in more moderate form CITI'S TAKE The banner policies of the DPP, which is positioned to cast deciding votes in the Diet after its gains in the Lower House election, are increasing the income tax exemption limit. Larger deductions reduce taxable income and hence taxes paid by workers. We think PM Ishiba may adopt these policies in the interest of economic package implementation but would expect more moderate tax cuts. At the sa ...

V i e w p o i n t | 28 Oct 2024 16:05:27 ET │ 13 pages US Economics Inflation Weekly – Home prices still subdued CITI'S TAKE Core PCE inflation for September released this week should be stronger than over the last few months (we expect 0.21%MoM). There could be some additional upward risks to certain components in October inflation, such as from medical or financial services prices. But overall, we still expect the trend of inflation to be slowing on average, partly as shelter inflation should continue to ...