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.

Economic Outlook

  • 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.

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We also have a short video featuring Johnson Financial Group’s Jason Herried and Annette Hellmer, that focuses on the:

  • Slowing economy
  • Potential for rate cuts later this year
  • Prospects for equities in light of slower earnings growth

Click here to watch the entire video

This information is for educational and illustrative purposes only and should not be used or construed as financial advice, an offer to sell, a solicitation, an offer to buy or a recommendation for any security. Opinions expressed herein are as of the date of this report and do not necessarily represent the views of Johnson Financial Group and/or its affiliates. Johnson Financial Group and/or its affiliates may issue reports or have opinions that are inconsistent with this report. Johnson Financial Group and/or its affiliates do not warrant the accuracy or completeness of information contained herein. Such information is subject to change without notice and is not intended to influence your investment decisions. Johnson Financial Group and/or its affiliates do not provide legal or tax advice to clients. You should review your particular circumstances with your independent legal and tax advisors. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your taxes are prepared. Past performance is no guarantee of future results. All performance data, while deemed obtained from reliable sources, are not guaranteed for accuracy. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Asset allocation and diversification do not assure or guarantee better performance and cannot eliminate the risk of investment losses. Certain investments, like real estate, equity investments and fixed income securities, carry a certain degree of risk and may not be suitable for all investors. An investor could lose all or a substantial amount of his or her investment. Johnson Financial Group is the parent company of Johnson Bank, Johnson Wealth Inc. and Johnson Insurance Services LLC. NOT FDIC INSURED * NO BANK GUARANTEE * MAY LOSE VALUE