With markets at all-time highs, we’re still finding plenty of bulls.
For example, in his annual letter to shareholders, JP Morgan CEO Jamie Dimon said strong savings, vaccine distribution, and a potential $2 trillion infrastructure spending bill, could lead to a “Goldilocks Moment” for the U.S. economy.
“We don’t know what the future holds and it is possible that we will have a Goldilocks moment – fast and sustained growth, inflation that moves up gently (but not too much) and interest rates that rise (but not too much). A booming economy makes managing U.S. debt much easier and makes it much easier for the Fed to reverse QE and begin raising rates – because doing so may cause a little market turmoil, but it will not stop a roaring economy,” said CEO Dimon.
Even Wells Fargo CEO Charlie Scharf is bullish on the U.S. economy, saying he sees it coming back from the pandemic in a strong way this year.
“Consumer demand is extremely high — over the last couple of weeks we, like others, have seen material increases in consumer spend, and that’s before the stimulus checks have arrived,” Scharf said, as quoted by Bloomberg. “We’re really bullish in terms of what the third and fourth quarters could look like.
At the same time, the economy does face plenty of challenges.
For one, we are a “nation torn and crippled by politics, as well as racial and income inequality — and a country unable to coordinate government policies (fiscal, monetary, industrial, regulatory) in any coherent way to accomplish national goals,” added Dimon.
Two, tensions with Russia are boiling over
At the moment, Russia has been actively building up military equipment in Eastern Ukraine. Russia is also warning NATO troops from deploying to Ukraine, saying that such action could escalate the situation. Making things worse, if tensions don’t cool, we could be looking at a world war within weeks, says a Russian military analyst, as noted by Express.
Three, we could even see a fight with China over Taiwan.
“We have indications that the risks are actually going up,” Adm. Philip Davidson, the most senior U.S. military commander in the Asia-Pacific region, as quoted by the Associated Press. “The threat is manifest during this decade — in fact, in the next six years.”
Let’s just hope both deescalate. The last thing we need now is a war.