Last month many economists had pushed down their estimates for first-quarter economic growth to near zero. The Atlanta Fed’s “GDP Now” model was projecting real GDP growth at a 0.2% annual rate in Q1, which would have been the slowest growth since the weather-related negative reading in the first quarter of 2014. But this time it was seen as a new trend leading us toward a recession.
We’ve been “Comrades in Supply-side Arms” with Stephen Moore (now a Federal Reserve nominee) and Larry Kudlow (Administration Economist) for decades, with very few disagreements on economic policy. However, with both having called for a 50 basis point cut in short-term rates, we find ourselves in total disagreement with their conclusion.
It feels like we are living in the Land of Oz and the Fed is the “all-powerful” wizard in control.
The environment on Capitol Hill has made populism a bipartisan affair, with Republican Senator Marco Rubio now joining the fray with a call to tax corporate stock buybacks.
It’s March 8, 2009. The market’s down 56% from its all-time high, unemployment is over 8% and hurtling toward 10%, it’s just been reported that real GDP dropped at a 6.2% annual rate in Q4 of 2008, and it feels like the world is coming to an end.
Real GDP grew at a 2.6% annual rate in the fourth quarter, and while some analysts are overly occupied with this “slowdown” from the second and third quarter, we think time will prove it statistical noise.
When it comes to investing, millennials are a cautious group. In fact, nearly half think it’s too risky to invest, according to the BlackRock Global Investor Pulse Survey. Rather than buying stocks and bonds, 70 percent of adults ages 25 to 36 are clinging to cash assets.
The clock is winding down, and the United Kingdom has some major decisions to make. Should it stay in the European Union or should it go? If it goes, under what terms? Some analysts and investors are concerned about a “Hard Brexit,” in which the UK supposedly plunges into chaos as they crash out of the EU without an agreement.
Whatever happened to the recession calls? Seems like just a few weeks ago that the correction in the stock market, as well as the partial government shutdown, had convinced many analysts and investors the US was about to enter a recession.