Consumer Confidence Grows
Macro Perspectives
We had some strong economic data come in for the month of May - durable goods and housing data were all very strong. Whilst consumer confidence for this month (of June) had a big bounce back, after trending lower for much of the first half of the year.
What could fuel a technical breakout in this confidence index (i.e. restoring confidence in the economic outlook)?
The removal of the risk of a banking crisis.
The removal of the risk of a U.S. government debt default.
The removal of the Fed's constant threats to destroy jobs and suppress wages.
Check, check, and check.
What else could underpin a surge in confidence? Â
Maybe a tsunami of yet to be deployed fiscal stimulus. All the more powerful if it were to coincide with the beginning of a new industrial (digital) revolution, accompanied by productivity gains comparable to the invention of electricity (in the words of OpenAI's co-founder).
Check, and check.
With this in mind, as we've discussed here in my daily notes, we need a period of boom-time growth. We need it to inflate away the unsustainable debt load, and we need it to return GDP to long-term trend (i.e. to close the post-GFC gap, between the blue line and the orange line).
I think we have the ingredients for it.Â
