04
Jan
Robust job market and economic cycle in the US
Fed stays the course. Record job creation and wage increases. Long-term interest rates no longer contracting. Equity markets on the upswing. Caution on earnings expectations.
Key points
- Federal Reserve stays the course in spite of market jitters
- 0.25% rate hike to 2.5%
- Fed marginally reduces its growth outlook for 2019 to +2.5%
- Job market will vindicate the Fed
- Strongest job creation and wage increases since 2008
- Leading indicators are now pointing to increasing concerns
- GDP will benefit from a favourable consumption climate in Q1
- Donald Trump’s strategy is far from beneficial for the US
- Inflation and long-term rates stabilise
- Limited prospects for the dollar
- As only 20% of investors are optimistic, it is time to be contrarian on equities
