Moderate economic slowdown. CPI at 3% in sight. Labour market eases. End of monetary tightening cycle. Sharpest drop in short-term rates. Dollar declines. Broader participation of equities in the upside.

Key points

• US economic momentum remains solid
• Moderate slowdown in Q2 (+1.2%)
• Leading indicators point to a slowdown
• Significant easing in the job market
• The Federal Reserve should give itself time
• Inflation declines, though some components adjust only slowly
• Volatility persists on yield curves
• Dollar likely to weaken in 2nd half
• Positive surprises for company profits

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