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Kit Juckes on the US: Reasons to be cheerful
The US
economic momentum may seem to be slowing, mainly due to the adverse weather seen at the beginning of the year, but Kit Juckes, Chief Economist at the ECU group, says the underlying growth is still there.
He explains that in the US, there's real wage growth - a huge contrast to the situation in the UK - and that the banking system there works too.
Kit does, however, voice his concerns over the impact the Federal Reserve's predictions can have on the wider markets. He explains that when investors and consumers expect a certain level of growth rate - and subsequently rates to be at at a certain level as a result - they start to do "stupid things".
And the same goes for the Fed's QE programme; markets must know what is actually going on. he says: "Monetary policy is like water behind a dam, the right level
of interest rates may not be the right level tomorrow. So reversing QE now can
cause much more damage than if you hold on to it."
The US nonfarm payroll data are out later on Friday. It is expected that US hiring increased in February and the jobless rate will hold at 6.6 percent. In January, figures dropped to 94,000.
01:31 minutes
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