Torsten Slok

Torsten Slok has been quoted 11 times. The two most recent articles where Torsten Slok has been quoted are The next recession now appears further away, thanks to Trump, economist says and Trump's policies may be Reagan-like, but the economy's not, says former Reagan economist. Most recently, Torsten Slok was quoted as having said, “So using those numbers we made some very simple assumptions and came to the conclusion that the market at the moment sees that we are at least two years away from the next recession, and this is very important because before the election with Donald Trump, the market was saying that we were about a year away, and the fact that we have pushed that out so much is certainly a very strong indicator that we are away from a recession quite a bit here.”.

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So using those numbers we made some very simple assumptions and came to the conclusion that the market at the moment sees that we are at least two years away from the next recession, and this is very important because before the election with Donald Trump, the market was saying that we were about a year away, and the fact that we have pushed that out so much is certainly a very strong indicator that we are away from a recession quite a bit here.

If you correlate the confidence indicator for consumers with actual consumer spending, it does show a very strong correlation so it's quite significant, the move we have seen this week, and what that means for consumer spending bodes quite well.

Fixed income markets and equity markets are following completely different narratives after the election.

This is a very important paper, because this is the first time that the Federal Reserve is really recognizing what we're talking about in financial markets, namely that growth will be low for quite some time.

Lower growth means lower earnings, but the flipside of that is that low interest rates means that equity valuations should be doing well.

The FOMC has been too optimistic for many years.

There are two competing explanations of why this expansion has been so weak. The first explanation is that we have been facing some headwinds from a cleanup in the banking sector, from a cleanup in the housing market, and from a cleanup of consumer balance sheets, and once those headwinds are fading, then that explanation would say that we should see accelerating growth.

The second explanation, is that we are now seeing a shift toward stories about productivity growth being weak about demographics being headwinds. So one story says that this is just temporary weak growth and then we'll be off to the races again, but the other story that's catching on is this permanent fear that maybe we are in a structurally low growth environment.

Financial markets for a while were completely out in the weeds, running around looking at things that turned out not to be real risk.

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