Federal Reserve chairman testifies before Congress 20191113

Economic indicators

  • Inflation is at all time low
  • Unemployment is at all time low
  • Consumer confidence is at all time high
  • Productivity has slowed down
  • Business  investments and manufacturing has contracted

Key take aways

  • China is doing a responsible job deleveraging it’s economy. This is one of the key drivers of economic slow down around the world apart from the ongoing US/China trade war
  • Global deflationary trend drivers
    • partly driven by worldwide aging population which sees increased savings rates and lesser consumption
    • automation and globalization
  • Ballooning US debt is a concern. Need to bring debt growth rate below productivity growth rate to be sustainable in the long run
  • The effects of the sugar rush from the 2017 tax cut is still evident within the economic system
  • Negative interest rates only makes sense in a large economies where growth is really sluggish. That is not the case for US where growth is strong and productivity is still high.
  • Need to focus on education to prepare work force for the global economy
  • US GDP is growing at 1.5% of which 0.5% is contributed by immigration

Related references


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