U.s. Economy And Fiscal Policy - 1674 Words

Economic update The U.S. economy appears to be in upward swing following three consecutive quarters of weak GDP. Underpinning third quarter growth of 3.5% was robust consumption, which posted a 3% annual change. Expectations for the fourth quarter are for 1.9% growth, placing the yearly change at 1.6%. Although 2016 will match the weakest yearly growth rate since the financial crisis ended, the focus is clearly on the strength in the past two quarters and outlook over the next three years. The election of Donald Trump as our next president surprised many and significantly widened the distribution of possible outcomes for the U.S. economy compared to what was expected prior to the election. Some have a high degree of optimism that†¦show more content†¦This one is occurring during the eighth year of the expansion and the economy is hitting many cyclical headwinds, such as rising interest rates, a stronger dollar, near full employment, and higher inflation. IG taxable Investment grade corporates were not as affected by the post-election price free-fall experienced by other select sectors of the fixed income markets. Notwithstanding the correction in rates, corporates delivered a respectable total return in 2016. The Bloomberg Barclay’s Intermediate Corporate Index, which is a proxy for our investment grade strategy focus, earned 4% last year, outperforming the comparable Treasury index, which posted a 1% total return. As we begin the New Year, nominal rates are attractive, and corporates continue to offer a meaningful yield advantage over Treasuries. While valuations have narrowed from a year ago, current credit spreads are in line with multi-year averages and have room to compress further. The compelling entry point is further buoyed by expectations for lower net supply, due in part to a shallower pipeline of MA activity and a heavy maturity schedule. We expect intermediate investment grade corporates to earn between 2%-3% this ye ar, outpacing Treasuries. We continue to have a sanguine view on credit and are overweight lower quality tiers. Improving economic fundamentals should accrue to corporate profitability as forecasts target 7% andShow MoreRelatedThe Current Macroeconomic Situation Of The U.s.794 Words   |  4 Pagesmacroeconomic situation† in the U.S. has improved greatly over the past few years. With the stock market at an all-time high, with data trends of unemployment trending down from 5.4 percent in April, 5.5 percent in May and now at an all-time low of 5.3 percent in July (U.S. Bureau of Labor Statistics, 2015). Last quarter economic growth was at 5 percent, relative mild consumer price-inflation, and the bonanza of cheap gas, there is increased optimism about the U.S. economy (Chafuen, A, 2015). Yet mostRead MoreFiscal Policy And Monetary Policy1735 Words   |  7 Pageswhich is fiscal and monetary policy to find out a way to find the economic. It is macroeconomic policy that pursues to enlarge the money sup ply to boost economic growth or combat inflation. One of the form is fiscal policy of expansionary policy, which comes in the method of tax cuts, discounts and increased government spending. Expansionary policies do come from central banks, which focus on cumulative the money supply in the economy. Now let look at the break down of expansionary policy which dealRead MoreKeynesian Economic Was Developed By British Economist John Maynard Keynes1033 Words   |  5 Pagesincreased and taxes were lowered, then the global economy could be pulled out of the depression. Macroeconomics is the study of national and regional economies. It examines economic factors like unemployment, gross national product, consumption, Inflation rates, Business cycle fluctuations and foreign trade. Keynes point of view about the Macro Economy was that the government must step in to correct the instability of the economy. If the economy faces a recession, government must increase demandRead MoreThe Great Re cession Fiscal Policy: Analyzing Problems and Solutions1429 Words   |  6 PagesAs a result of the Great Recession of 2007 to 2009, the United States government implemented various fiscal policies in an effort to stimulate the economy. How the government responded as well as how those responses will affect the U.S. economy into the future are the focus of a proposed research study. In order to ensure an appropriate focus for the proposed research study, problems in existing literature must be evaluated. This paper is structured as follows. In order to better understand theRead MoreExpansionary Policy1254 Words   |  6 PagesExpansionary Fiscal and Monetary Policies Macroeconomics: ECO 203 Professor Charles Aki September 1, 2013 The US economy has seen some detrimental changes over the past decade. These changes resulted in unsubstantial unemployment rates, fluctuating interest rates, unstable GDP, and an increase in taxes. The federal government has an obligation to citizens to respond to the changes in the economy that affect each household. Expansionary Fiscal and Monetary Policies are economic policies used by theRead MoreWhat Is Fiscal Multiplier?920 Words   |  4 Pageshighest the U.S. has ever experienced. In terms of percentage of GDP, debt and deficit levels are higher than they have ever been in a time of relative peace in U.S. history. With the U.S. not currently involved in a major war or crisis, it is economically unsustainable to continue running these deficit levels. This is the most important fiscal policy issue that needs to be addressed. When developing a plan for fiscal policy, it is important to understand the current fiscal multiplier. Fiscal multipliersRead MoreThe Conflict Between Inflation And Unemployment1343 Words   |  6 Pagespower of money. There are policies designed to control demand- ­Ã¢â‚¬ pull or cost- ­Ã¢â‚¬ push inflation for example by reducing aggregated demand but may lead to a contraction of output and a rise in unemployment. Similar to how inflation can conflict with unemployment, deflation may also lead to a rise in unemployment. There are some policies in place to help if this was to happen. The fiscal and monetary policies are used as tools to keep the economy stable. Monetary policy is primarily concerned withRead MoreThe Conflict Between Inflation And Unemployment1374 Words   |  6 Pagespower of money. There are policies designed to control demand- ­Ã¢â‚¬ pull or cost- ­Ã¢â‚¬ push inflation for example by reducing aggregated demand but may lead to a contraction of output and a rise in unemployment. Similar to how inflation can conflict with unemployment, deflation may also lead to a rise in unemployment. There are some policies in place to help if this was to happen. The fiscal and monetary policies are used as tools to keep the economy stable. Monetary policy is primarily concerned withRead MoreTwo Of The Most Implemented Policies Government Use To Achieve Economic Growth Are Monetary Policy And Fiscal Policy1667 Words   |  7 Pagesï » ¿Introduction According to a article by Rich Karlgaard from forbes. During the great recession. U.S economy was performing better then expected and was growing. From 2008 to 2010, U.S GDP is projected at 14.3 trillion, 14.2 trillion, 14.6 trillion. So how did this actually happen? Carl Schramm, who heads America’s top entrepreneurial think tank, the Kauffman Foundation, explain in a interview with the author: â€Å"The single most important contributor to a nation’s economic growth is the number of startupsRead MoreU.S. Federal Government and Economic Issues Essay1231 Words   |  5 Pagespaper; I will write about the U.S. federal government operations and how government leaders handle macroeconomic issues in our economy. We will discuss a couple of current economic issues and what the federal government is doing to reach solutions. I will also address U.S. unemployment issues, international trade, fiscal and monetary policies, and methods of alternative energy, along with the Federal Reserve’s role to confidently curb recession and avoid inflation The U.S. federal government is actively