The highest annual rate in 37 years. Sounds good to me. Fed likely to forecast biggest economic boom in a generation https://www.msn.com/en-us/money/mar...c-boom-in-a-generation/ar-BB1eFuC8?li=BBnbfcL WASHINGTON (Reuters) - Federal Reserve officials are due to issue new economic projections on Wednesday, with GDP growth likely to be a blow-out number that sets the stage for an historic experiment by U.S. central bank policymakers. In each of the quarterly forecasts released since June, the median GDP growth projection of Fed officials has been slightly above the median of private forecasters polled by Reuters. If that holds, it would translate into expected growth this year of more than 6.2% - the highest annual rate in 37 years.
Until certain things are addressed, it isn't a glimmer in the Feds eye. People can't return to work when businesses have closed their doors permanently.
That could also just as likely be the sign of a gigantic bubble forming. Like what typically happens before every big crash.
Lot of people (anyone who invest in stocks) do bet on the economy. American consumers are sitting on $1.7 trillion, which they will spend as soon as they can travel and get back to normal iterations of life, which is happening this year as vaccinations continue. Fed sees stronger economy and higher inflation, but no rate hikes https://www.cnbc.com/2021/03/17/fed...onomy-higher-inflation-but-no-rate-hikes.html Gross domestic product is expected to increase 6.5% in 2021 before cooling off in later years, according to quarterly economic projections from members of the Federal Open Market Committee. That median estimate represents an improvement from the anticipated 4.2% gain during the last round of projections in December Eventually, yes, but after 2020 we have room for boom.
What does the Fed think about printing so much money that even the Fed can't keep track? There has to be a limit, no?
A lot of people who invest in stocks also bet against the economy as well. Either way, 9% unemployment and the sectors most hit by covid still languishing, a 15% of GDP injection of stimulus resulting in 2% additional growth is nothing to be bullish about IMO.
Not really. What they said is that we are stuck at zero interest rates. Investors have 2 real options to beat inflation--stocks and bonds. Telling people we are going to be stuck at zero interest for the next few years gives those investors only 1 option if they want to make money--roll the dice in the stock market. That is why stocks indices jumped some.
Everyone will have to act on their instincts, which is pretty much always the case. Personally I would not bet against an economy which is predicted to grow 6.5%, but that's just me.
Very low interest rates are either unsustainable over the long-term, or they are a sign of very low growth levels. That's pretty basic economic theory. To see claims of sustained growth, and be having very low interest rates, means that something about the current situation can't last. For the Fed to maintain low interest rates, in the face of pressure for higher interest rates from the market, carries a tremendous cost, which is paid for in inflation. People shouldn't trust experts without doing their own little bit of critical thinking.
The IMF expects China to see growth at 8.1% for 2021 and the entire global economy is expected to grow at 5.5%. There is nothing special about the US economy treading water on massive debt spending.
I invest my 401K in international funds. That isn't betting "against the US". With higher risk comes higher rewards.
No, it is not betting against the US, but you did say something about betting against the economy. EU growth is predicted to be slower than US, and even China is expected to grow slower than US.
I was indicating I wouldn't bet on the 6.2% growth in 2021. The fed forecast has no anticipated changes in interest rates for the year, indicates that the sectors hit by COVID are still sucking wind, and our unemployment rate is stable still well above pre-Covid levels. A billion vaccine shots won't be the overnight fix to the economic blows some businesses and sectors took.
I was referring to this: What you say is true, - many sectors are still hurting, and unemployment is still up. Actually the rate looks better than it is, because many have given up looking. However, they expect things to pick up, and even if we don't return to pre-pandemic levels this year, they still expect improvements. Is it a good time to go "all-in"? No one knows. Personally I feel optimistic, but that doesn't mean things will go my way. I am at an age when I can't take too many risks without putting my retirement plans in jeopardy, so I'll just sit back and hope for the best.
