‘Tis the season of prognostication, and in an age of one-word answers to complex questions, we’ve also witnessed a great deal of #hedged-language #forecasts ending in the suffix “ish,” so not to be outdone, we’d say that 2020 is looking rather 1.8ish!
What on Earth could this mean? We would suggest, firstly; that rather than seeing a calamitous #recession in 2020, or a strong cyclical resurgence of #growth, we instead think that real #GDP growth is likely to moderate slightly to around 1.8%, its average level since 2005.
Further, over the next year, we think that #CorePCE #inflation may firm somewhat to around 1.8%, which is just above the average level for the measure over the past 15 years.
In the context of such growth and #inflation, it’s likely we’ll see the 10-Year U.S. #Treasury note trade in a range around 1.8%, and barring a downside risk to growth emerging (the next election?), we don’t expect the #Fed to move policy rates much from 1.8%ish.
So, while laying out such a moderate #economic backdrop for 2020 may not yield great headlines, or the television spotlight, it nevertheless holds some very important implications for #portfolio construction decisions in the year ahead. More on that will be forthcoming…
Share this Scrolly Tale with your friends.
A Scrolly Tale is a new way to read Twitter threads with a more visually immersive experience.
Discover more beautiful Scrolly Tales like this.