Last night, I had the pleasure of listening to U.S. Sen. Tim Scott speak about the economy and Washington at our company dinner during this year’s AALU meeting. It was a refreshing discussion about some of the positive economic factors driving U.S. growth.
Last week, Q1 GDP surprised to the upside at 3.2% versus an expected 2.3%. This comes at a time when business sentiment is at an all-time high and unemployment remains very low. These factors of current economic performance and future outlook are supported by a Federal Reserve (Fed) that is taking a wait-and-see approach to inflation.
At its meeting later this week, it is widely expected the Fed will continue to keep rates unchanged despite recent growth. I will be watching to see how the Fed characterizes the economy and the inflation outlook.
While our 24-hour news cycle focuses on the negatives, it is important to look at the fundamentals of the economy and the future path of monetary policy. Both elements remain positive for growth and equity markets. Add to this the potential positives of a trade deal with China and the opportunity for more gains in the equity market is quite significant.
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