Share on StockTwits
Join our smart investors - Get the best stock directories in  blockchain, cannabis, crypto, AI, IoT, cleantech. Daily podcasts in cannabis and crpto. Just $99  a year

deVere CEO: The U.S. economy could be heading for a Fed-induced hangover


August 21, 2018 ( Newswire) The U.S. economy may be heading for a Fed-induced hangover next year, warns the chief executive of one of the world's largest independent financial advisory organizations.

The message from Nigel Green, founder and CEO of deVere Group, comes after President Trump ramped up Monday his criticism of the Federal Reserve.

In an interview with Reuters, Mr Trump said he was "not thrilled" with the Fed's chairman, Jerome Powell, and that he would continue to criticize the central bank if it continued to raise short-term interest rates.

Mr Green comments: "Trump's latest attack on the Fed is likely to be ignored by the central bank's policymakers. It is almost certainly not going to derail the raising of U.S. interest rates, with the next hike likely to be next month, as they attempt to take the heat and froth out of the economy.

"The domestic U.S. economy is currently growing at an annualized rate of around 4 per cent a year.

"But given that the current strong growth is likely to accelerate the rate hikes, a Fed-induced hangover may be on the cards for the U.S. economy next year as it is slowly encouraged to cool down."

"However, fears in the market about a full-blown recession in 2019 are misplaced."

He continues: "With domestic economic growth easily outpacing that seen in Europe or Japan this year, and the dollar likely to rise further on Fed rate hikes, an overweight position in American stocks is currently justified.

"S+P500 stocks have had two quarters of strong year-on-year corporate earnings and revenue growth, while the index itself has failed to pass late January's all-time high. This suggests that valuations have fallen, reducing fears of Wall Street being over priced."

He goes on to say: "The American stock market is diverse, and not just about the FAANGs. True, tech does make up a quarter of the index, but the category includes companies as diverse as chip makers and social media operators. Meanwhile, there is a large market of mid and small-cap stocks for investors to explore, enabling further portfolio diversity.

"The S+P500 total return index, which includes dividends re-invested, reached a new high a few weeks ago. This demonstrates the power of re-investing dividend income. Indeed, financial history demonstrates that for a long-term investor to make the highest returns, reinvesting the investment income within a portfolio is a key factor."

The deVere CEO concludes: "The Fed is going to stick to its current trajectory of raising rates - despite Trump's criticism. The criticism itself seems a bit odd considering it is Trump's tax cuts and reforms that are probably the key driver of the growth spurt that is helping force the Fed to tighten monetary policy."

t: +44 207 1220 925
Twitter: @PriorConsults

deVere Group is one of the world's largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

More Info: Newswire

This news is published on the Newswire - a global digital news source for investors and business leaders

Disclaimer/Disclosure: is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investment involves risk and possible loss of investment. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Contact each company directly regarding content and press release questions. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. More disclaimer info: Learn more about publishing your news release on the newswire

Additional info regarding BC Residents and global Investors: Effective September 15 2008 - all BC investors should review all OTC and Pink sheet listed companies for adherence in new disclosure filings and filing appropriate documents with Sedar. Read for more info: Global investors must adhere to regulations of each country.

Please read privacy policy:

Follow Us on StockTwits