The economic future appears more optimistic to Americans today.
The unemployment numbers for Friday were very good. The biggest rise in almost a year occurred in March, with a 303,000 increase in non-farm payrolls and a 3.8% decrease in unemployment.
Mazars’ senior economist, George Lagarias, stated that the U.S. economy is generating more jobs than expected.
Immigration has led to an increase in employment and spending.
Jamie Dimon from JPMorgan Chase talked sensibly about interest rates. Bloomberg/Getty
The US economy grew by 4.9% and 3.4% in the third and fourth quarters, respectively. The Atlanta Fed GDP tracker projects 2.5% growth in the first quarter.
According to Bill Adams, chief economist of Comerica Bank, “people will continue to spend this year, which will extend the economic expansion.” “Inflation will moderate, and jobs and earnings will rise.”
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Their wealth is evident. Senior financial analyst Daniel Casali of Evelyn Partners, a wealth management company, writes that in March of this year, there was a 6% increase in the labor market, hours worked, and nominal labor income compared to the same month last year.
The inflation rate almost doubled in February.
Strong job growth surprises Wall Street.
As the economy grows, the Fed will be less able to cut interest rates. In March, the Fed predicted three rate reductions this year. The Fed will not cut interest rates, according to just 48% of traders in interest rate futures.
According to Apollo Global Management senior economist Torsten Slok, there won’t be any interest rate reductions in 2024.
Larry Summers, a Harvard economist and former Treasury Secretary, predicts a 15% increase in interest rates in the near future.
Between March 2022 and July 2023, the Federal Reserve hiked rates eleven times, from 5.25% to 5.50%.
Goldman Sachs raises its GDP projection by a factor of two.
Given the job data from last week, reputable financial expert Goldman Sachs projects 2.5% GDP growth for 2024. This is more than the 1.4% market estimate.
Related: There is no denying the economy’s strength.
The cautious rate cut by the Fed conflicts with Goldman’s projection.
“The Fed had already been apprehensive about cutting rates in the summer, and a stronger economy certainly does not make the case for monetary easing,” he stated.
Jamie Dimon alerts us to the risks.
Jamie Dimon, a well-known banker and CEO of JPMorgan Chase, warns that the economy may suffer from rising market interest rates.
Upon the failure of three regional banks in the spring of 2023, he declared in his annual shareholder presentation that “we thought that the banking crisis was over.”
Jamie Dimon, the CEO of JP Morgan, issued a warning regarding inflation and the status of the economy.
“However, we stipulated that the crisis was over, provided that interest rates didn’t go up dramatically, and we didn’t experience a serious recession.”
The following: “There will be plenty of stress if long-end rates go up over 6% and a recession accompanies this increase,” Dimon said. Stress will impact not only the banking system but also leveraged companies and others.
The rates on Treasury notes maturing in ten and thirty years were 4.42% and 4.55%, respectively, on Monday. Dimon failed to bring it up.
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Bond markets accept the Fed rate narrative, in contrast to equity markets. Core pressures decreased in February, while inflation kept rising. Vanguard forecasts high rates ahead of the Fed meeting.
Nonetheless, “a simple 2-percentage-point increase in rates essentially reduced the value of most financial assets by 20%.”. “And… office real estate may be worth even less due to the effects of the recession and higher vacancies.”
According to Dimon, the economy might not be prepared for the Fed’s higher-for-longer interest rate aim: “Recall these exceptionally low rates.” How many investors and companies are prepared for increased borrowing rates is unknown.
Related: Astute fund manager selects winners for 2024 stocks
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