Analysts at ANZ, suggest that the gap between soft and hard economic data has started to close in the US due to the failure of administration to carry out policy momentum.
“Not long ago we were talking about a large gap between the positive ‘soft’ data and the still somewhat ho-hum ‘hard’ data, at least in the US (although it is not unique to the US). Well perhaps that gap is starting to close, with US consumer confidence off highs. We can blame the US administration’s failure to gather much policy momentum for the drop, but the reality is that many economies are struggling to achieve the rates of growth seen in the past. Weak productivity, excessive leverage, unfavourable demographics, poor policy manoeuvrability and political risks are big headwinds to surmount. Reality is often failing to meet (perhaps historically skewed) expectations, meaning a bit of a reset is needed.”
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