27four Investment Managers
22nd January 2021
US consumer geared to fuel a cyclical recovery
US households are looking strong financially, with elevated cash holdings and balance sheets which are in great shape. This coupled with Biden’s promise to roll out a sizeable US fiscal stimulus which will generously increase the size of cash transfers and unemployment benefits to individuals bodes well for the US economy, which is predominantly consumer-driven and by extension the global economy.
The narrative feeds nicely into our reflation trades investment theme, which we highlighted in our latest Monthly Financial Markets Outlook. Vaccine distribution hiccups which are being experienced in some countries and a continued surge in Covid-19 cases somewhat tamper with that outlook.
Source: Federal Reserve Bank of St. Louis