The US economy is currently on course to enjoy its third consecutive quarter of 3%+ growth, largely due to higher capital spending on industrial and information technology equipment.
Despite zero policy help from Congress and the Trump Administration, respectable inflation-adjusted wage gains have helped to boost consumer confidence levels to their highest since 2000.
US consumers appear to be ignoring political machinations in Washington, since neither Congress nor President Trump appears to be receiving any credit for faster economic growth.
The Fed is extremely unlikely to lower forward guidance as the unemployment rate dips below 4%, despite continued low inflation. US industrial capacity is not growing as aggressively as the late-1990s, thereby making it unlikely to have the same detrimental impact on future profit margins.
Declining pre-tax profit margins at US non-financial firms have been evident since 2014 Q4, while higher selling prices could become a more favoured option to prevent further declines in order to meet corporate profit expectations.
DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the intention of delivering independent global macro investment insights and new thematic long-term ideas to investors, along with an agnostic opinion of the markets.
Said DeSaque has over 29 years of experience working as a professional economist in financial services, primarily based in London. His working role has involved extensive travel around the world, bringing him into contact with investors of different cultural backgrounds and investment requirements. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist and Investment Strategist at US banks Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he became Head of the London Economics Department in 1996. This role allowed him to engage with senior investment professionals, alongside regulators and provided a unique perspective of market intelligence at work.
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