Saturday, September 21, 2024

Soft landing: What could possibly go wrong?

 

The latest BoA Global Fund Manager Survey shows that a soft landing for the U.S. economy is the overwhelming consensus.

Fed Chair Jerome Powell leaned into that narrative at the post-September FOMC press conference after announcing the rate cut. He characterized the cut as “an appropriate recalibration of our policy stance”. The economy “has continued to expand at a solid pace”. Conditions are not recessionary: “Growth of consumer spending has remained resilient, and investment in equipment and intangibles has picked up from its anemic pace last year”.

 
Such a scenario should be equity friendly, but presents headwinds for bond prices. What could possibly go wrong?

The full post can be found here.

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