Mark Zandi is Chief Economist at Moody’s Analytics. He’s posted over the weekend a glowing review of the US economy.
I reckon there is a big warning in this … but first, he is what he said (in brief):
with last week’s big GDP revisions, there is no denying it: This is among the best performing economies in my 35+ years as an economistEconomic growth is rip-roaringfull employmentInflation is fast closing in on Fed’s 2% targetHouseholds’ financial obligations are lightCorporate profits are robuststock market is hitting a record high on a seemingly daily basis
So, what’s my warning? Well, twofold:
1. The Fed is slashing interest rates, 50bp so far and plenty more to come, so we are told
2. China is rolling out significant stimulus, and with more over the weekend
Not arguing with Zandi, I think he’s right. But … perhaps the FOMC should take the foot off the accelerator, or least lighten its touch.
Maybe China will export deflation and its all good?
Comments welcome.
This article was written by Eamonn Sheridan at www.forexlive.com.
