Vanguard is the world's second-largest asset manager. The firm's global head of rates expects less aggressive Federal Open Market Committee (FOMC) rate cuts, citing in part:
- global risks of a rebound in price pressures
- signs of stubborn inflation in the US
Vanguard's base scenario is for a "deferred landing" for the US economy, which entails continued economic growth and higher inflation than the Federal Reserve wants, but not high enough for interest rate hikess again:
- and warns of tail risks such as a rebound in inflation or weakening in economicc growth
Vanguard also warns of fiscal profligacy to come:
- "If either of the presidential candidates was to campaign on a platform of fiscal expansion, we do think that will be very market relevant"
---
On that last point, I reckon they both will.
