‘Fed likely to keep rates higher for much longer than expected’
Chris Versace, CIO of Tematica Research, explains why investors may be surprised how long the Federal Reserve is willing to keep rates high, after the central bank has hit the peak of this tightening cycle.
Versace also shares his views on AI and cleaner living trends with IGTV financial analyst @AngelineOng.
(Video summary)
What are some factors that could impact the US economy in the near future?
In this video, Angeline Ong and Chris Versace, the CIO of Tematica Research, chat about what's happening in the economy and what might happen in the near future.
They point out that the US economy has been doing better than expected, but there are still some things to keep an eye on. For example, there's a strike by the UAW (a union for auto workers), a possible government shutdown, and students might have to start paying back their loans again.
They also talk about the upcoming holiday shopping season and how shoppers might not spend as much as they did last year. They discuss the possibility of a recession, but they think that if the US Federal Reserve (Fed) takes actions that are more cautious than people expect, it could lead to worry about a recession. However, they believe any recession would most likely happen in the first half of 2024, not in the near future.
They also talk about some trends in different industries, like artificial intelligence and technology, and how companies are changing their business models to fit with those trends. They also mention the growing interest in healthier living and sustainable products. They think that companies that are shifting towards these types of options are worth investing in. They suggest keeping an eye on which products are getting more attention on store shelves and looking for companies that are taking advantage of this trend.
Potential risks to be aware of in the second half of the year
They mention some other potential risks in the second half of the year, like China reopening its economy and how that can affect oil prices, wage deals and inflation, and possible actions by central banks. They point out that if China's manufacturing economy picks up again, it could increase the demand for oil and that could make prices go up. They also mention that there might be more pressure for higher wages due to labour strikes and minimum wage increases.
Finally, Chris talks about what concerns him the most. He worries about missing out on an important piece of information that could make him change his investment strategy. He emphasises how important it is to stay informed about what's happening so that you can make smart investment decisions.
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