First, yield curve inversion between long and short bonds triggered market fear that US economy was on the wane. Coupled with Donald Trump’s threatening comment in Twitter on US and China trade dispute. Then markets were further shattered at the news of the Hua Hui CEO arrest. All these but upset markets all over the world.
What market could take heart of was US Fed signaled a less tightening liquidity regime to come because “US cash rate is now near the neutral rate”.
Markets were happy about it but at a loss how Fed could change its rate schedule narrative in just a month without further support of empirical data. It could well nurture further uncertainty as some analyst suggested.
In addition, there were news that US and China negotiation team had made some good progress. They combined to give the markets a reason of support.
Considering US markets had suffered a heavy sell off recently, it begs the question if US economy on the wane, close to the end cycle of economic growth , or at the door step of imminent recession as yield curve inversion suggested.
Our guest, Dr Po Man Chan, an independent economic analyst and strategist argued that US economy is near the end growth cycle but still distance away from recession.
