‘Shutdown in US mainly political show without much economic damage’
The American government is still partly down, but according to… Mark Dowding, chief investment officer at RBC BlueBaythe shutdown is mainly a political show without much economic damage. He points out that behind the scenes the US remains remarkably strong. With tax cuts, deregulation and some more rate cuts on the horizon, Dowding expects growth of around 3% next year, a pace he says will force the Fed not to ease too quickly.
According to Dowding, the labor market looks tight, even if the figures next month appear temporarily weaker. “Even zero job growth can keep unemployment stable.”
With core inflation around 3%, he expects one more rate cut as insurance against a dip, but then a pause. The market, he warns, is getting too far ahead in its expectations of further easing.
Dowding is counting on Fed Chairman Jerome Powell’s successor, possibly Scott Bessent, to safeguard the central bank’s independence.