U.S. Economy And Stock Markets Continue To Defy Wall Of Worry

U.S. Economy And Stock Markets Continue To Defy Wall Of Worry

Share to Linkedin Despite inconsistent retail sales, lower consumer confidence and a rapidly changing job creation landscape, the U. S. economic backdrop remains healthy and should continue to benefit from friendly monetary policy. The August jobs report was disappointing primarily due to the COVID-19 Delta variant's impact on leisure and hospitality employment. Yet it sets up a potential goldilocks scenario with the U. S. Federal Reserve on hold longer, and economic reacceleration possible as Delta subsides. The Fed's "substantial further progress" barometer for the labor market has not yet been met. This could delay the anticipated tapering of quantitative easing, pushing back the next tightening cycle. When the Fed does begin to renormalize monetary policy away from extraordinary crisis measures finally, its overall stance is expected to remain quite accommodative. This should continue supporting the bull market, benefiting equity investors in the near term. The more things change, the more they stay the same. What has not changed is market and macro fear and risk. Surging infections caused by the Delta variant has caused some investors to retrench. Market observers worry about hitting an economic soft patch in coming months. Meanwhile, in the 25 states that did not opt out