60 seconds with Keith Wade on the economic outlook for the US
Keith Wade gives his view on the outlook for the US economy ahead of the release of the retail sales and consumer confidence data.
Recent robust US economic data has heightened the prospect of the Federal Reserve raising interest rates by mid-2015. The strength of the recovery in the jobs market has begun to add some inflationary pressures to the economy, which have offset the impact of lower energy prices. But while we put the probability of a rate rise in the US in June at close to 60%, the market is pricing in just a 25% chance.
In this 60 second video, Schroders economist Keith Wade gives his broad overview of the US economy: “The US has reached take-off velocity and is on a self-sustaining path. We are seeing jobs increase, we are seeing household incomes rise and that is supporting consumer spending, so we do believe the US is set fair for 2015.”
If that scenario continues to play out then the odds of a rate hike in the US by mid-2015 could shorten further. So investors will keep a close eye on upcoming economic data out of the US including; retail sales figures out on Thursday and consumer confidence numbers due for release on Friday.
Important information: The views and opinions contained herein are those of the named author(s) on this page, and may not necessarily represent views expressed or reflected in other Schroders communications, strategies or funds. This document is intended to be for information purposes only and it is not intended as promotional material in any respect. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Schroder Investment Management Ltd (Schroders) does not warrant its completeness or accuracy. The data has been sourced by Schroders and should be independently verified before further publication or use. No responsibility can be accepted for error of fact or opinion. This does not exclude or restrict any duty or liability that Schroders has to its customers under the Financial Services and Markets Act 2000 (as amended from time to time) or any other regulatory system. Reliance should not be placed on the views and information in the document when taking individual investment and/or strategic decisions. Past Performance is not a guide to future performance. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall. Any sectors, securities, regions or countries shown above are for illustrative purposes only and are not to be considered a recommendation to buy or sell. The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change. Forecasts and assumptions may be affected by external economic or other factors. Issued by Schroder Unit Trusts Limited, 31 Gresham Street, London, EC2V 7QA. Registered Number 4191730 England. Authorised and regulated by the Financial Conduct Authority.