The US economy has long been established as one of the world’s richest and most diverse world economies. As the owner of some of the largest industry sectors, natural resource supplies, and internal goods market, the US is one of the most powerful global trading and financial influences.
Following the financial crisis in the late 2000s, growth in the US slowed dramatically; recovery from high unemployment, household debt, and income inequality in the years since remains one of the slowest on record. In 2017, however, a jump in global economic growth lifted demand for goods, industry profits and stocks to see the US experience the best growth in years.
Donald Trump has also claimed that it is his government and policies which are behind this national economic uplift, though the contributing factors are much broader. Recovery has proved steady, though issues of wage stagnation and inequality remain.
As one of the UK’s leading investment managers, LGIM offers knowledge and experience that can bring real benefit to investors looking to understand economics, policy and politics in the United States of America.
Find the latest news stories on pressing topics such the impact of US national debt and comments on announcements of the Federal Reserve.
Our Asset Allocation team includes dedicated and accomplished US, European and Global economists, whose focus is to assess the macroeconomic environment across the developed world. This includes researching US government policy, emerging political trends, as well as the outlook for economic growth and inflation within the United States. Our economists then work with our team of strategists and portfolio managers to translate their views into what this means at a portfolio level.
History suggests that equities struggle to make gains ahead of US mid-term elections. With anti-trade rhetoric likely to feature in this autumn’s campaign, this time is unlikely to be different. On the other hand, we have also learnt to be prepared for the opposite with President Trump.
On the face of it, Donald Trump has proven to be an aggressive and erratic US president. Yet academic research shows 'good cop, bad cop' works as a negotiating technique. Although we're seeing a lot of 'bad cop' Trump at the moment in the trade war, is this just a negotiating tactic?
Is there an Archimedes principle at play in financial markets? As central banks withdraw liquidity by shrinking their asset holdings, does it inevitably imply bad news for investors? We look to theoretical, historical and contemporary clues to find out.
Without adjustment on the home front, we believe that President Donald Trump's push to reduce the trade deficit is unlikely to improve the US trade balance, or boost domestic employment and growth. However, his outspoken approach and questioning of the prevailing trade system may be the very jolt that global trade negotiators need to update their thinking and move ahead with a constantly changing global economy and patterns of trade.