JP Morgan's Kolanovic on the US June CPI result in a note Monday:

  • has slightly increased the Federal Reserve’s chances of a “soft landing”
  • “While we still see the Fed hiking at the July meeting, the downside CPI surprise means a narrow path to a soft landing is modestly wider”

  • remains skeptical “that a soft landing can be achieved in which inflation returns to central bank comfort zones on a sustained basis without a downturn.”

  • warned that European stocks face risks in H2 from more European Central Bank tightening
  • US small- and mid-cap equities may offer “quite a bit of upside” if inflation falls to 2.5% and interest rates start to come down
Kolanovic