Inflation has picked up again. While some of this acceleration is seasonal, this development has complicated central-bank calculations over when to cut interest rates. 

The US economy continues to demonstrate surprising strength. That said, our base case is for inflation to moderate gradually later this year and for the US economy to achieve a soft landing.

Prominent risks to this outlook include wage-growth inflation; services inflation; and the possible re-ignition of inflation linked to disruption in supply chains and energy provision. 

For now, we expect an increasing number of central banks to cut interest rates this year. But the timing is data dependent and could be pushed later. The Bank of Japan, which is hiking rates, is an important exception.

Donald Trump leads the polls in the US presidential election. A second Trump term could exert upward pressure on inflation and the US dollar, with the growth impacts depending on the balance of tariff and tax policy.