We're in a period of significant disinflation, says John Hancock's Emily Roland

Housing Market & Disinflation - Housing inventory is at its highest level since 2020, indicating a potential slowdown in demand [3] - Home prices experienced a decrease last month, marking the first decline since January 2023 [4] - John Hancock believes housing disinflation will influence economic data, potentially leading the Fed to cut rates more than anticipated [4] Inflation & Tariffs - The analysis suggests that disinflation, particularly in the service-based economy, might offset the potential inflationary effects of tariffs [6] - Markets are overly focused on potential inflationary impacts of tariffs, while underlying disinflationary trends are being overlooked [2][5] Labor Market & Economic Growth - Initial claims are being closely monitored as indicators of potential cracks in the labor market, with a level approaching 260 signaling a more significant deceleration in growth [7][8] - Economic indicators, such as PMI data, suggest a slowing economy, and leading economic indicators have rolled back over [13] - While a recession is not anticipated, a gradual deceleration in growth is expected, with consumer spending showing signs of pullback [12] Fed Policy & Market Expectations - The Fed may be behind the curve in recognizing disinflationary data, similar to the market's oversight [10] - The bond market is pricing in only one to two rate cuts this year, which is viewed as inconsistent with current economic dynamics [10] - There's a possibility the Fed is already too late in adjusting its policies, potentially leading to more rate cuts than currently expected [9][10] Investment Strategy - John Hancock recommends locking in elevated income through high-quality bonds, given elevated bond yields [8] - The recommended investment strategy for the remainder of 2025 is to focus on income generation through high-quality bonds and dividend-paying stocks [14]