Per his Monitor, Roubini expects the U.S. economy to continue a solid expansion in the second half. The group anticipates inflation to rise slowly as excess supply is absorbed by 2017. The group does not believe earnings and valuations are artificially supported by Fed policy. They anticipate unemployment to drop to 5.9% by end 2014. They expect a Fed rate of 2-2.25% by the end of 2016, with neutral at 3.5-3.75% by 2017. [Remarkably for Dr. Doom, Roubini seems relatively sunny; and anticipates a higher Fed rate possible in 2017 than PIMCO. But since higher rates mean lower bond prices, it may be that PIMCO, a leading bond manager, is arguing for lower rates in the future in order to sustain higher bond prices and therefore its own investment base.]
Posted on: Mon, 22 Sep 2014 21:08:44 +0000
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