Analysts at Natixis explained, that currently, everybody seems optimistic about the growth outlook for the United States but warn that will slow down in the US.
Key Quotes:
“surveys remain positive, job creation is strong.”
“But it is certain that the United States will return to full employment: with a 3.8% unemployment rate and without an upswing in the participation rate, unemployment cannot be very far from structural unemployment.”
Accordingly, US growth prospects will probably be revised downwards in the second half of 2018, leading to:
A fall in equity markets;
“A fall in expected short-term interest rates and in long-term interest rates;
“Depreciation of the dollar;
“Return of capital flows to emerging countries; ï® Downturn in cyclical commodity prices.”
“In the first half of 2018, expectations for US growth have been strong, given the inevitable return to full employment, and the US growth outlook will gradually become lower.”
“This reversal of growth expectations for the United States will have the expected effects on all financial markets (equities, interest rates, exchange rates, emerging countries, commodities).”
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