By Bill Dudley
As concerns about declining numbers of people are more likely, people are more likely to respond Beating.
I don't agree with the principle: I don't think there will be a reduction in this year, and when it comes I think it will be enough to handle the Fed.
Three things concern concerns about decline. First, recent data – such as low employment growth and retail sales – have become weaker – indicated by the Scottish economy United States It loses some of the motion. Second, the recent change in the yield curve is that of some of the long-term bond yields falling under short-term results.
This is significant as deposits in a fruit vessel have been attributed to a historical decline in the US. Third, the current economic expansion is taking too long: in just a few months it will be the longest in the history of the USA.
However, I would suggest that there is little risk to the decline. On one hand, some cases that are of concern are lower.
Financial constraints have been sustained as the stock market has recovered from the decline of December. China it is heartening its economy again. And from my perspective, the USA seemed to be in the end of China's trade agreement. This would help eliminate the uncertainty that has led to investment companies being diverted.
There are also concerns about investment in the fruit loop. These fears would be more specific as the Fed caused their investment by changing monetary policy.
That doesn't happen, as the US's quiet financial situation appears. The loop loop is flat because larger investors are responsible for economic and economic weakness and are faced with a rise in inflation. The links are considered to be good cover for stocks if the economy should decline.
It is also comforting that the most important part of the US economy, the domestic sector, is in very good form. Income on acceleration, employment-led and payroll benefits. Household finances are very strong: debt levels increased slowly during this expansion, and debt payments represent the minimum income in many decades.
Finally, government spending continues to increase, as a result of last year's increase in federal budget limits. This will increase demand and stimulate economic activity.
For all who said, I don't believe there is a fear of a decline in a short time. On the one hand, economic growth is likely to be slow on the first quarter, limited by government closure, commercial insecurity, delay in repayment of tax, and possibly technical difficulties with technical constraints. relating to seasonal change.
And there is still a bit of uncertainty: it could be elevated in trade tightening to China and could potentially increase taxes; inflation could rise beyond acceleration, which would pressure the Fed to rebuild interest rates; The Congress could not extend the expansion in discretionary spending limits, which would also encourage the government to recover back on investment.
In addition, there is a range of vulnerabilities that can reduce any decline: physical debt. During this extension, companies have moved up, borrowed money to buy back shares and help to reduce their credit rating.
As a result, there has been a dramatic increase in the level of debt assessed as “BBB”, a large part of which could have been included in a waste field when the recession is hit. Significant increases in the number of waste bonds can cause abuse due to the fact that this market is small in relation to the size of the debt market on the level of investment. This may lead to credit crises to remove these companies' problems.
In addition, the tax law and the US economy employment cuts made them more vulnerable in two important ways. First, companies that lose money in a decline cannot recoup from their tax payments from previous years. Secondly, the legislation is designed to bring the interest of interest to a close. As the profits fall, these barriers will be more closely connected.
Despite these problems, I don't expect the recession, when it happens, to be as hard as the last. The improvements relating to the financial crisis seem to be particularly hurtful, and I think the USA has made enough to repeat the 2008 disaster. the country is more likely to fall simply that the Bible should be treated.
Even though middle taxes have a reduced tax charge, if the maximum level of federal funds is 3% or less, there are many other devices such as advanced forecasts and causal instability to promote the economy without knowing that tax. being essential And, the increase in country debt does not stop using fiscal policy use.