Weekly Commentary: Not your typical rate cutting cycle

We see inflation limiting how much central banks can cut interest rates. We like U.S. stocks over Europe’s as they benefit from the artificial intelligence theme. Markets remain sensitive to Federal Reserve policy signals and its rate path, helping lift the VIX index of implied S&P volatility from four-year lows last week. Markets will be parsing signals for future rate cuts by the European Central Bank (ECB) and updated macro forecasts at the policy meeting this week.