Schroders global investment reflects that as the global economy tends to stabilize, the recent series of inflation data in the United States exceeding market expectations poses a major turning point or obstacle on the way forward. The team's baseline forecast is that the U.S. economy will achieve a soft landing. However, the team acknowledges that the series of inflation data in the United States exceeding market expectations, as well as the potential uptick in the global manufacturing cycle, may have the opportunity to raise commodity prices, increase the risk of the economy not landing, and possibly force central banks around the world to maintain higher interest rates for a longer period of time to address persistent high inflation. Due to strong economic growth leading to increased inflation risks, the possibility of the economy not landing is rising. Schroders global investment points out that the strong recent inflation data in the United States seems to lie somewhere in between, despite the rise in a series of economic data, and the possibility of the Federal Reserve cutting rates later in 2024 cannot be ruled out. This will undoubtedly give authorities reason to pause and think, with the likelihood of a rate cut in June 2024 currently relatively low. Looking at Federal Reserve Chairman Powell's preferred inflation indicator (i.e., core services excluding housing), the trend in the past few months is indeed worrisome. In the latest economic data released, this super-core inflation indicator has risen by 0.7% monthly, with the current three-month annualized inflation rate exceeding 8%. Looking at a wide range of data indicators, the reality is that inflation is currently too high, and the Federal Reserve cannot implement loose monetary policy in the short term. Nevertheless, the U.S. inflation issue is not all bad news. As fixed income investors, there are more reasons to be optimistic about the local labor market. From various economic indicators, it seems that the U.S. labor market is returning to balance, wage growth is trending downward, job vacancies are gradually decreasing, and most importantly, employee quitting rates continue to decline. The quitting rate is a leading indicator of wage growth; its decline reduces the pressure on companies to attract and retain employees, thereby limiting the pace of wage growth. Over the past month, the global manufacturing outlook has continued to improve. Positive news has also come from mainland China recently, which may significantly boost economic growth in the Eurozone in the coming months. While these economic data help achieve a soft landing for the economy, caution should be exercised regarding the continuous rise in commodity prices, as this could exacerbate future inflation pressures and challenge the view of a rate cut in 2024. Schroders global investment points out that although valuations are more attractive (cheaper), the market's view on macroeconomic developments reflects that yields will rise and that the Federal Reserve will take a more cautious stance. In view of this, a neutral stance is held on duration (or interest rate risk), but a more positive view is taken on the steepening of the yield curve (i.e., making investment allocations based on short-term bonds outperforming long-term bonds). In terms of cross-market trades, a relatively favorable view is held on the UK compared to markets like Germany and Canada, as local inflation is expected to catch up with the levels in the US and other countries. Over the past month, a more positive view is held on balanced inflation (i.e., performance of real yields relative to nominal yields after capturing inflation adjustments). The upside risk in commodity prices and the partial relaxation of policies by central banks will benefit balanced inflation rates. Regarding credit, based on high valuations and limited further upside potential, the team has adjusted their outlook on European investment-grade bonds. Shorter-term bonds are still favored because they still hold investment value. With the spread of US investment-grade bonds nearing historic low levels and the potential return on investment-grade corporate bonds lesser compared to more stable government bonds, a negative view is being maintained.