ECONOMIC MARKET ANALYSIS: Looking Back to Look Ahead
The first half of 2019 was solid. And we expect continued growth for the overall economy in the second half of the year. But growth still seems to slow through the end of 2020.
* By Jason Schenker *
The first half of 2019 was solid. And we expect continued growth for the overall economy in the second half of the year. But growth still seems to slow through the end of 2020. Part of that slowing appears likely, in part, due to a potential slowing in business investment. But the consumer remains a bright spot that is likely to support overall GDP growth. And the Fed is going to be patient and cautious going forward.
There were economic and business risks going into 2014th when Fed Chairman Jay Powell was joined by former Fed chairs Ben Bernanke and Janet Yellen to laud the state of the U.S. economy and labor market, and to emphasize how dovish the Fed could be in the face of adversity—or at least in the face of significant equity market declines. Not coincidentally, I had a radio interview scheduled immediately after the Fed chair comments and instantly started calling this event of market-reassuring messaging from these three Fed chairs “Dovefest 2019.”
And so it was.
Equity markets that had fallen sharply in the fourth quarter of 2018 improved sharply as did consumer confidence, retail sales, and oil prices. That strategic about-face of the Fed was critical for setting 2019 on a much more positive growth path.