US outlook: a soft landing supported by the Fed

En bref

Fears of a US recession have abated, but we still expect growth to ease from 2.2% to 1.6% in 2020.
Focal Point

Highlights:

  • Fears of a US recession have abated, but we still expect growth to ease from 2.2% to 1.6% in 2020. The end of the fiscal stimulus and headwinds to capex from existing tariffs and lower profitability will be the main drag.
  • Growth will be increasingly reliant on consumption, supported by the labor market and subdued inflation. Interest rate-sensitive components of demand, especially housing, will enjoy the boost from lower interest rates.
  • Politics remains the biggest risk factor. The choice of who will oppose Trump in the November election could become another big source of uncertainty from Q2 on. The trade truce with China has reduced tail risks, but a quick and meaningful rollback of existing tariffs appears unlikely.
  • The dovish turn taken by the Fed has been instrumental in delivering a soft landing. Our outlook of relatively weak growth in the first part of the year makes another, final, rate cut in Q2 more likely than not. The announced policy changes and especially a likely move towards an average inflation targeting will give a dovish tilt to the stance.

Read the full publication below

US OUTLOOK: A SOFT LANDING SUPPORTED BY THE FED

Also interesting

Picture

© Generali Investments, tous droits réservés. Ce site internet est publié par Generali Investments et est considéré comme une communication marketing et une promotion financière liée aux produits et services des sociétés du groupe Generali suivantes : Generali Investments Partners S.p.A. Società di gestione del risparmio, Generali Insurance Asset Management S.p.A. Società di gestione del risparmio, Generali Investments Luxembourg S.A. et Generali Investments Holding S.p.A. (ci-après dénommées ensemble Generali Investments). En outre, le site peut contenir des communications de marketing et de promotion financière de produits et services de sociétés faisant partie de la plate-forme Multi-Boutiques coordonnée par Generali Investments Partners S.p.A. Società di gestione del risparmio, et en particulier de Generali Global Infrastructure, Sycomore Asset Management, Aperture Investors LLC, Plenisfer Investments SGR, Lumyna Investments et Generali Real Estate S.p.A. Società di Gestione del Risparmio.