Bloomberg Surveillance
Surveillance: Hollenhorst on Soft Landing
Aug 11, 2023
Citi Chief US Economist doesn't expect US soft landing. Markets focused on Europe, China. Upcoming retail earnings from Walmart, Target. House behind the curve. Future of financial markets and disciplined risk management discussed. Impact of keeping interest rates for extended period explored. Mixed messages in the market and frustration over store closures. Complexities of US-China relations and impact of money on college football highlighted.
30:33
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Quick takeaways
- Andrew Hollenhorst predicts that the US economy will not achieve a soft landing due to factors like tight labor markets and solid growth.
- Emily Roland suggests diversifying investments into sectors like healthcare, which offer defensive positions, quality metrics, and favorable valuations compared to the S&P 500.
Deep dives
Inflation and the Economy
Andrew Hollenhorst, Chief US Economist at Citigroup, discusses the potential impact of inflation and the state of the economy. Hollenhorst analyzes inflation data, including subcomponents like PPI and CPI, and suggests that there are signs of upside risk and short-term fluctuations. However, he believes that the overall trajectory of the economy, driven by factors such as tight labor markets and solid growth, will likely keep inflation at elevated levels rather than achieving a soft landing. Moreover, he highlights the importance of considering longer-term trends and the possibility of a higher neutral policy rate in relation to inflation.
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