Economic Outlook Spring/Summer 2017

 In Financial

Economy Highlights

  • The Federal Open Market Committee (FOMC) raised short-term rates 25 basis points in March
  • Large trade deficits curtailed domestic growth for the most recent period
  • Failed health care reform threatens other aspects of President Trump’s agenda
  • Upcoming elections in France pose rick to Euro zone economic recovery
  • The European Central Bank (ECB) could become the next major central bank to raise rates later in the year

Equity Highlights

  • Strong performance for equity markets during the first quarter
  • Reflation trade showed signs of unwinding, resulting in rotation away from value
  • Valuations remain elevated for U.S. based companies
  • U.S. Dollar weakness contributed to international markets outperforming

Fixed Income Highlights

  • Interest rates have remained stable at higher post-election
  • Inflation expectations remain low and stable
  • The Federal Reserve increased target rates in early 2017 and further increases are anticipated
  • Non-U.S. debt markets have been impacted by a variety of local/regional issues
  • High yield debt remains attractive but valuations may be near peak levels