Quick inventory

• American acceleration versus European weakness
• Monetary status quo on both sides of the Atlantic

In the United States, activity was particularly weak in the first quarter with the Q2 rebound, even substantial, just offsetting the slump. For 2014 as a whole, GDP growth will miss the Fed’s projections, and is more and more likely to be just shy of 1.5%. Labour market conditions improve and will keep on doing so, leading the FOMC to end QE3 as expected. Despite the improvement, overcapacities remain large enough to put down pressures on both wages and prices, and the Fed will remain highly accommodative for a while.

The publication of national GDP figures for the second quarter is expected to confirm how weak the economic recovery is in the eurozone. However, some periphery countries such as Spain and Ireland are managing. July surveys also suggest a moderate improvement in the economic situation at the beginning of the third quarter. In this context, inflation should remain at low levels over the coming months. For 2014 as a whole, we expect inflation at 0.6% and just slightly above 1% in 2015. Despite some signs of improvement, credit statistics continue to remain rather disappointing. Even though both credit and inflation dynamics are subdued, the ECB will not embark on further actions any time soon.