US economy looks increasingly wobbly - Rabobank
|Michael Every, Head of Financial Markets Research at Rabobank, suggests that as we stumble towards another 25bp rate hike from the Fed in December, the US economy looks increasingly wobbly; yes, Q2 GDP was revised up slightly to 1.4%, but corporate profits dropped 1.7% y-o-y: unless investment or spending is going up as a result, that’s another worry.
Key Quotes
“Yet we can all be soothed by Janet Yellen, who yesterday mentioned in testimony that the Fed expanding asset purchases to equities might be “a good thing to think about” to get around the limits to QE/safe assets in any future US downturn. That comes in the same week that already saw a US presidential debate where one candidate stated, “We are in a big, fat, ugly bubble.”
It’s either a sign of my deepening cynicism, or central banks’ deepening desperation, or both, that I find Yellen hinting the Fed might buy equities.”
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