Uncertainty is a bad thing. That is the case now, as it always has been, especially on the markets. Investors have always thrived in periods of certainty, but this year it is definitely hard to find. The US stock market, as a consequence, is not doing so good.
The current hesitation is mostly related to the economic situation in the US. Some market watchers are not really buying the recovery story fully, because the level of involvement of the US central bank is something that is very hard to gauge at this point.
It is not so easy, namely, to figure out just how much of a push the Federal Reserve has given the markets through its policy of quantitative easing. That there was an effect on the economy is a no-brainer, of course.
Four Reasons Why The US Economy Will Grow
Goldman Sachs’s Jari Stehn is not that pessimistic, however, and does believe that the US economy can stand on its own two feet. There are four reasons why the economy will start to grow faster, according to Stehn, and they do sound plausible.
In the first place, it appears that an end has come to the stream of negative macro data regarding the economy that has been published over the last few months. The expectations are not sky high anymore and the effect of the adverse winter weather is fading as well.
Thirdly, interest rates will remain at their low levels for at least another year, which means that companies will still be able to borrow money cheaply. Finally, the leading indicators for capital spending are in an uptrend once more. These are the four reasons why Stehn believes the US economy will grow by 3 percent.
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