- FED policy and us economy, what’s next?
FED policy and us economy, what’s next?
Monday 31 December 2018
Research / Market
US economy: We expect the US economy to grow above potential in 2019 and to gradually converge to its long-term growth rate of around 2% in 2020 as the boost provided by fiscal expansion in 2018 will gradually lose steam.
The path ahead for the Fed: With the economy running above potential and the labour market becoming tighter, the Fed may choose to continue normalising and hiking rates until signs of a deceleration in growth materialise. The Fed’s expectations regarding inflation are broadly aligned with our own forecasts (2.2% Amundi vs 2.3% Fed median), but risks remain tilted to the upside. In our view, the Fed will be more cautious than in 2018 and we expect a pause in the hiking cycle by mid-2019 at the latest.
The US government shutdown becomes the longest in history
The US Government shutdown started on December 22 2018 is currently the longest ever, with little evidence of end in sight. In recent US history, since 1976, there have been 21 shutdowns, lasting from 1 to 21. The longest so far took place under Clinton on Dec 15,1995.
The Alpha and Beta of ESG investing
With the rising awareness around ESG issues worldwide, institutional investors have started to massively look into responsible investment. The latter has grown substantially in Europe and in North America in the past 5 years.
Global Investment Views - May 2018
CIO views: High conviction ideas from Amundi Global Investment Committee