As usual, the line to watch is the thick green one, which minimises the "error term", or to put it another way, makes the underlying trend easier to detect.
This is unambiguously an economic recovery. And it's accelerating.
Implications:
- The Fed will delay rate cuts until inflation is lower, but, at the same time, inflation may fall more slowly
- So what will drive the share market will be earnings per share rather than valuations (P/E or earnings yield)
- The economy will be in a much more favourable state for the re-election of the incumbent president.
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