Evercore's Altman: U.S. economy outpacing every single forecast, soft landing has already happened

Summary

In the video script, Roger Altman of Evercore discusses the Federal Reserve's stance on interest rates, noting that officials oppose near-term rate cuts amid inflationary pressures. Altman highlights the U.S. economy's remarkable strength, with growth forecasts for 2024 almost double initial predictions. He emphasizes the economy's resilience, with real growth of 8% since 2019, outpacing all global forecasts. Altman also touches on factors contributing to this strength, such as energy costs and labor force growth, while acknowledging the stickiness of inflation.

Takeaways

• 🏦 The Federal Reserve (Fed) officials are not in favor of any rate cuts in the near term, emphasizing their focus on battling inflation.
• 📈 Roger Altman of Evercore highlights the strong performance of the U.S. economy, noting its resilience and growth despite global economic challenges.
• 💼 Altman points out that the U.S. Personal Consumption Expenditures (PCE) index, a key metric for the Fed, is expected to be in the mid-threes, indicating high inflation.
• 📊 Economists initially predicted a growth rate of 1.3% for 2024, but now see it as almost double that, showcasing the unexpected strength of the U.S. economy.
• 🌐 The U.S. is the only major economy that has grown in real terms since 2019, outpacing Europe and other regions.
• 🏭 Altman suggests that the U.S. has an edge in energy costs, which is attracting manufacturing and contributing to economic growth.
• 💼 The labor force in the U.S. has grown strongly, unlike the rest of the world, which is crucial for economic expansion.
• 💰 There is still a significant amount of excess pandemic savings, estimated at $300-400 billion, which could be influencing consumer spending.
• 📈 Oil and gas production, as well as productivity growth, have been positive factors for the U.S. economy.
• 💹 Despite high inflation, the U.S. stock market is performing well, with valuations and multiples above historical averages, reflecting the overall strength of the economy.

Q & A

What is the current stance of the Federal Reserve on interest rate cuts?

The Federal Reserve officials are not in favor of any rate cuts in the near term, focusing on the battle against inflation.

What is Roger Altman's view on the current inflation data?

Roger Altman notes that the data and prints on inflation are on the hot side, suggesting that the PCE, the Fed's favorite metric, is expected to be in the mid-threes.

What is the expected impact of immediate rate cuts on the economy according to Roger Altman?

Altman suggests that immediate rate cuts and a lot of them for 2024 would be a negative result, indicating that the focus should be on the strength of the economy rather than short-term rate adjustments.

How does Roger Altman describe the strength of the U.S. economy?

Altman describes the U.S. economy as having remarkable strength, noting that the growth rate for 2024 is expected to be almost double the initial forecasts.

What was the initial forecast for the U.S. economic growth rate in 2024?

Six months ago, the majority of economists thought the growth rate for 2024 would be about 1.3%.

How has the U.S. economy performed compared to other economies since 2019?

Since 2019, the U.S. economy has grown by 8% in real terms, making it the only economy in the world that is now bigger than it was before the pandemic.

What is one factor contributing to the U.S. economy's resilience, as mentioned by Roger Altman?

Altman points out that the U.S. has an edge in energy costs, which is attracting manufacturing and contributing to the economy's strength.

What is Roger Altman's perspective on the role of excess pandemic savings in the current economy?

While acknowledging that there is still around $300-400 billion of excess pandemic savings, Altman believes that the strength of the U.S. economy goes well beyond this factor.

What are some factors contributing to the growth of the U.S. labor force, according to Roger Altman?

Altman mentions that the U.S. labor force has grown strongly, unlike the rest of the world, which is a crucial part of the supply side needed for overall economic growth.

How does Roger Altman view the current state of productivity growth in the U.S.?

Altman notes that labor productivity has been impressive over the past two years, contributing to the overall positive performance of the U.S. economy.

What is the general sentiment in the market regarding the U.S. economy's performance?

Altman suggests that the market is generally high, with multiples above historical averages, reflecting the strong performance of the U.S. economy.