Markets and Economy
Economic & Market Outlook – 2019 Mid-Year Review
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The first half of 2019 included continued economic growth and strong returns from most asset classes. The abrupt change in Federal Reserve policy toward an easing bias helped fuel both equity and bond market gains. We expect U.S. economic growth to continue in line with the average growth rate for this expansion. Equity returns will depend on the expected pace of earnings growth in 2020 and current estimates may be overly optimistic. Fixed income returns should benefit from expected Fed easing.
- At the end of June, U.S. economic growth matched the longest economic recovery on record and has begun a new record for the longest expansion.
- Our expectations for real GDP growth in 2019 remain largely unchanged at 2.0%-2.5%, moving the pace of growth back toward the average growth rate for this expansion.
- Our growth estimates assume a favorable resolution to the trade war, without any further escalation.
- Slowing economy
- Potential for rate cuts later this year
- Prospects for equities in light of slower earnings growth
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