Ignore the Stock Market. The Economy Looks Fine.
- 6 years ago
Ignore the Stock Market. The Economy Looks Fine.
For what really matters — the well-being of the economy
and the ability for individuals and companies to prosper in the years ahead — look first to fundamental economic data, especially those that tend to be leading indicators.
The Federal Reserve Bank of Atlanta tracks incoming economic data to estimate current growth of gross domestic product,
and its indicator is pointing toward robust economic expansion — a 4 percent annual rate.
Bond investors are pricing in higher inflation than the United States has experienced in recent years,
but roughly in line with the 2 percent the Federal Reserve aims for.
And that’s why the best way to make sense of the drop in the stock market is to think of it as a sideshow to the broader trajectory of the United States
and global economy, which for now look perfectly fine.
Other market indicators that might signal global economic troubles, like the price of oil, instead point to a steady-as-she-goes global economy.
For what really matters — the well-being of the economy
and the ability for individuals and companies to prosper in the years ahead — look first to fundamental economic data, especially those that tend to be leading indicators.
The Federal Reserve Bank of Atlanta tracks incoming economic data to estimate current growth of gross domestic product,
and its indicator is pointing toward robust economic expansion — a 4 percent annual rate.
Bond investors are pricing in higher inflation than the United States has experienced in recent years,
but roughly in line with the 2 percent the Federal Reserve aims for.
And that’s why the best way to make sense of the drop in the stock market is to think of it as a sideshow to the broader trajectory of the United States
and global economy, which for now look perfectly fine.
Other market indicators that might signal global economic troubles, like the price of oil, instead point to a steady-as-she-goes global economy.