Vanguard’s base scenario is a “deferred landing” for US economy, less aggressive Fed cuts

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”

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On that last point, I reckon they both will.

This article was written by Eamonn Sheridan at www.forexlive.com.