Quarterly Real U.S. GDP Growth
Estimates for 2019 gross domestic product are coming down; while the first quarter ended with a 3.1% growth rate, evidence from the manufacturing sector and inventory data suggest that the second quarter’s will only be around 1.5%. As a result, the Federal Reserve has indicated there will be no more rate increases this year, and there may be rate cuts before year-end.
Treasury Yield Curve
The U.S. Treasury yield curve, describing the interest rate term structure, shows the impact of Federal Reserve rate hikes at the short end, declining expectations for economic growth in the near term, and only moderate inflation risks in the longer term. Forté Capital does not hold the view that the inversion from overnight to three years indicates an imminent recession.
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