Economic growth for the United States, I am predicting, will come in around 2.0 percent. The economy will be driven by the supply-side, barring any major shocks.
Inflation will remain below the Fed’s target of 2.0 percent. The US dollar will continue to strengthen during the year. The stock market will also continue along reaching some more new highs in 2020. More on this in my next post.
The Federal Reserve will play a role in this scene, but it won’t be one of driving economic growth to new heights. As mentioned above, the economy is being driven by its supply-side and will continue to expand in this way for the foreseeable future… baring any disruptive downturn.
The Fed will play a big role in this scene, although if it is successful, little recognition will be given for the work it accomplished.
First of all, the Federal Reserve will continue to work to prevent any shocks or disruptions to the financial system that might produce a disturbance that would bring an end to the current expansion.
The Federal Reserve has played a major role in the current economic expansion (at the end of December the current expansion will be ten-and-one-half years old) not only in getting the recovery going but in sustaining it as it aged.
During the last four years or so, the Fed has backed away from the overt stimulus of the economy, to a position where it serves as a “put” in which it will do what is necessary to err on the side of monetary ease to avoid any uncomfortable disruptions to financial markets.
In playing this role, the Federal Reserve has underwritten the US stock market and created an environment for stock prices reaching ever-new historic highs.
In this role, the Federal Reserve has provided a
