US Equity and Bond Investors May Face Prolonged Wait Before Fed Decides Who Is Correct
​US economic growth under the Trump Administration has hitherto been below the upbeat expectations of equity and bond investors. The Trump Administration’s reflationary economic agenda was supposed to be a big game changer for the long-standing positive correlation between US equity prices and bond yields, something which has hitherto failed to materialise.Economic policy implementation will have an impact on deciding which investor group’s views are vindicated, but the uncertain timing of fiscal policy easing suggests the Fed will have the final say. The continued reluctance of the yield curve to steepen, due to a falling term premium, will impart macroeconomic stimulus, somewhat reminiscent of the final stages of the previous economic expansion when the housing sector was a major beneficiary.Historically, the unemployment rate has bottomed shortly after the yield curve has inverted, thereby implying that the current steep slope indicates further labour market tightening.
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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