US Economic Outlook – 2 Aug 2019
The US consumer segment remains strong and labor markets tight. At the same time, uncertainty surrounding trade tensions and a related global growth deceleration have translated into weaker domestic business investment and pressure on the manufacturing segment. In addition, inflation pressures remain muted.
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- We forecast real GDP growth in 2H19 to slow despite the Fed's "insurance" cut this week.
- We do not foresee a near-term resolution to the trade tensions, and expect the related uncertainty to continue to weigh on manufacturing and business investment.
- We also now expect the Fed to cut rates two more times (Sept, Jan) and project 10-year yields to end both 2019 and 2020 at 2.0%.
- Revisions to historical GDP data led to a technical change for our 2019 annual average growth forecast, to 2.3%.