The US economy continues to display impressive resilience to the headwinds it is facing
The US economy continues to display impressive resilience to the headwinds it is facing, and the gloomy economic forecasts.
The June payrolls report dispelled any notion that the US labour market is stalling. Steady job creation was matched with a downtick in unemployment, and jobless claims numbers continue to bounce along near all-time lows.
Incidentally, the report gave further support for chair Powell's wait-and-see attitude and reluctance to cut rates as Trump is aggressively pressuring him to do.
The passing of the Republican budget bill, which guarantees massive fiscal deficits as far as the eye can see, seems to have done little to move markets in the short term, but as in the UK we expect bond markets and their willingness (or lack thereof) to accommodate all this red ink to be an increasing factor in policy making in the coming months and years.
Author
Matthew Ryan, CFA
Ebury
Matthew is Global Head of Market Strategy at FX specialist Ebury, where he has been part of the strategy team since 2014. He provides fundamental FX analysis for a wide range of G10 and emerging market currencies.
