Question

In: Finance

I would like you to discuss the current state of the economy and whether forecasters are...

I would like you to discuss the current state of the economy and whether forecasters are predicting that the economy will continue to expand or whether a recession is coming. You can compare such forecasts to what is implied by the term spread. There is no right or wrong answer but feel free to speak your mind.

Solutions

Expert Solution

Current state of economy- US economy has been growing for a long time. U.S economy is healthy as per the key economic indicators.

There is expansion in the economy, jobs are being created and employment has increased. There is job for every one if he has the good qualification. Stock market is doing well and Dow Jones is near its all time high.

Forecast- Gross domestic product (GDP) outlook is good and GDP is rate is expected to remain between 2% to 3%. There will not be more inflation or deflation. Inflation rate will be 1.8% in 2019. President Trump has said to increase the economic growth to 4% that is really a healthy growth rate. The unemployment rate will be 3.5% in 2019, it may slight increase in 2020.

Federal open market committee has already increased the current fed rates to 2.5% in December 2018. It is not expected to increase any more. Crude oil price will be around $61-$62/Barrel.

Conclusion- Overall U.S economy will be steady and balanced, it won't be fluctuating so much.


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