Economic growth is expected to be slower than last year while additional progress on disinflation has slowed down, according to Federal Reserve Governor Adriana Kugler in a speech on Monday. Furthermore, Kugler notes that the first quarter GDP decline of 0.3% likely overstated economic activity given imports being front-loaded.
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Kugler Floats Risk of Higher Inflation, Slower Growth
What’s more, Kugler says that tariffs will continue to lead to economic uncertainty and lower sentiment, even with the U.S.-China trade agreement announced this morning.
“Trade policies are evolving and are likely to continue shifting, even as recently as this morning,” said Kugler. “Still, they appear likely to generate significant economic effects even if tariffs stay close to the currently announced levels, and the uncertainty associated with these tariffs has already generated effects on the economy through front-loading, sentiment, and expectations.”
Despite Kugler’s speech, the S&P 500 is trading well in the green with technology and consumer cyclical stocks leading the way based on TipRank’s S&P 500 Heatmap.
