Fiscal

Dear Client, This week, we are publishing a Special Report co-produced with Mark McClellan, who writes The Bank Credit Analyst. This report discusses the long-term outlook for the dollar and argues that the greenback is in a structural downtrend.…

In this Special Report, we review the theory behind exchange rate determination and examine the cyclical and structural forces that will drive the dollar. The long-term structural downtrend in the dollar is intact. This trend reflects both a slower…

Highlights The 2018 outlook for both economic growth and corporate profits remains constructive for risk assets, although evidence is gathering that global growth is peaking. Some measures of global activity related to capital spending have softened in…

Highlights BCA's view is that while a major trade war is unlikely, trade tensions will persist. The Fed, not protectionism, will end the cycle. There have been five episodes in the past 35 years when global growth surged and fiscal, monetary and…

Highlights Russian equities are among the cheapest emerging markets, and among the cheapest in the world - a re-rating could be epic; Weak growth potential and poor governance present tremendous challenges; Yet macro fundamentals are sound and economic…

Highlights Easier fiscal policy will cause U.S. inflation to rise or force the Fed to raise rates more aggressively than the market is discounting. Either outcome is likely to lead to a real appreciation in the dollar. Policy developments are starting to…

Fiscal Stimulus To Prolong The Expansion The market swoon in early February should not induce investors to lower risk. The stock market correction (the first for almost two years) was triggered by a couple of inflation and wage readings that came in…

Highlights The political path of least resistance leads to fiscal profligacy - in the U.S. and beyond. The response to populism is underway. The U.S. midterm election is market-relevant. Gridlock between the White House and Congress does, in fact, weigh…

Highlights BCA has shifted its view on how fiscal policy will impact the U.S. economy, the path of S&P 500 earnings growth and the 10-year Treasury yield. While we remain positive on risk assets, the U.S. is in the late innings of the expansion and…

Highlights We are shifting our U.S. recession call from late-2019 to 2020. A cheap dollar and fiscal support will give the Fed more scope to raise rates before monetary policy moves into restrictive territory. The fiscal impulse will fall sharply in 2020…