Top UBS Asset Management professionals discuss the current state of the economy, including a soft landing concept, resilience of growth, decreasing inflation, positive real incomes, and expected rate cuts by the Fed. They also analyze global economic conditions, stable PMIs in Europe, demand for tech goods, and the potential for global growth beyond the US.
Recent data suggests a 'soft landing' in the economy, with declining inflation and moderate growth.
Lower inflation will prompt the Fed to cut rates, but there is no need for aggressive action as the global economic outlook is positive.
Deep dives
Soft landing camp and declining inflation
The podcast discusses the concept of a 'soft landing' in the economy and how recent data supports this view. Inflation has decreased more than expected, with core PC inflation below the Fed's target at 1.9%. Additionally, the Atlanta Fed's tracking of Q4 GDP estimates growth at 2%, aligning with long-term trends. This environment of moderate growth and declining inflation is seen as positive, with real incomes remaining positive and giving consumers more spending power.
Expectations for rate cuts and global economic outlook
The podcast explores the implications of declining inflation and a softer economy on the Federal Reserve's actions. The hosts believe that lower inflation will prompt the Fed to cut rates in the spring. Financial conditions have eased, which some argue may make the Fed hesitant to cut rates. However, the podcast emphasizes that the economy has earned this easing, and there is no need for the Fed to aggressively push against market expectations. Moreover, the global economic outlook is also positive, with signs of improving demand for tech goods and stabilization of PMIs in Europe, indicating a broader global growth that goes beyond the United States.
Hear from top investment professionals from the UBS Asset Management’s Multi-Asset Team, this month featuring Evan Brown, Portfolio Manager and Head of Multi-Asset Strategy, and Tom Digenan, Head of Americas Investment Solutions Specialists.
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