Economy Pushes on as Trump Approaches First 100 Days
April 12, 2017
We believe inflation is rising more quickly than many appreciate, and that the FOMC risks falling behind the curve. A more positive economic outlook and rising inflation may lead to more hawkish Fed policies. We continue to believe credit sectors offer modest value compared to government securities. The deterioration in credit quality is most pronounced in the investment-grade market. The potential for corporate tax cuts and cash repatriation under the Trump administration has provided a tail wind for equities following Trump’s election. We believe US equities should be favoured over fixed income, as valuations are relatively better.