Snapshot: The US central bank’s more dovish stance has been welcomed by markets. We forecast another rate rise this year if activity picks up as expected.
We believe that US earnings growth will slow in 2019, but we think the more challenging corporate environment may provide a rich backdrop for stockpickers.
Valuations have become more attractive and fundamentals are reasonably positive. But a period of transition looms, with central bank support being withdrawn and government bonds now offering a more compelling alternative than they have in many years.
Quickview: The US midterms have, as expected, seen the Democrats take the House with the Republicans holding the Senate. Our investment experts consider the implications for fiscal policy, trade, and the 2020 presidential election.
We still see scope for further interest rate rises from the Fed this year, following yesterday’s 25 basis point hike at the March meeting of the FOMC.
Core inflation looks likely to accelerate further, putting pressure on the Federal Reserve to keep tightening policy.