Valentine Ainouz Bastien Drut & , Strategy and Economic Research at Amundi
Choose your country :
Choose your country ?
The election of Donald Trump led to a surge of confidence in prospects for the United States. Rarely in recent decades have survey results shown such astonishing improvement. One of Donald Trump’s ambitions was to bring economic growth above 3% over the long term, notably through a large-scale tax reform plan. It should be noted, however, that the hard data has been quite weak these past few weeks. But above all, it is the United States’ position in the credit cycle that makes a substantial acceleration in growth unlikely.
The United States’ position in the credit cycle is apparently going to keep US growth from accelerating substantially, because US corporate debt has reached historic highs, particularly for the major groups with access to the financial markets, and because consumption could be penalised by excessive use of consumer credit in recent quarters. In this context, it will be especially difficult for the Fed to significantly accelerate tightening of its Fed funds rate and a pronounced rise in US long-term interest rates is unlikely