Delivering Global Macro Investment Insights

DeSaque Macro Research

DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investment insights aimed at providing new ideas to clients.

Said DeSaque has over 26 years of experience working as a professional economist in financial services. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist at Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he eventually became Head of the London Economics Department.

Said takes a very keen interest in international relations, along with their implications for economic development. His research interests include the economic transformation of China and its implications for global capital markets, particularly in the United States. He is a member of Chatham House in London.

The US economy and capital markets have historically been Said’s main focus of attention. He frequently presents his views to institutional investors in diverse geographic locations. In recent years, Said has also been carefully monitoring economic developments in Asia, particularly China and Japan.

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Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Cross Asset Strategy

<div>Household-based measures of US labour market strength in March suggest the Federal Open Market Committee (FOMC) will not need to alter forward guidance in 2021, despite the much larger-than-expected increase in non-farm payrolls. Meanwhile, strong readings in the ISM surveys for manufacturing and services last month suggest Q1 growth in excess of +6%, although the trajectory for Q2 will depend heavily on how new stimulus payments are utilised by US households.</div>
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<div>Hitherto, stimulus payments to households have produced unintended consequences, notably the paying down of credit card debt and higher retail activity in the US equity market as opposed to being spent in its entirety in the real economy. The shutting down of the economy in 2020 provided households an opportunity to repair balance sheets, but the level of thrift is currently still higher than a year ago, thereby suggesting that fiscal policy easing has not been totally effective in boosting consumer spending.</div>
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<div>The biggest threats to the outlook for US equities stem from potential policy mistakes by the Fed and the Biden Administration, notably the latter's plans for further fiscal policy expansion under the auspices of infrastructure programmes. Strong economic expansion and a rise in the velocity of circulation of money will test the tenability of the FOMC's forward guidance and asset purchases as pressure on hitherto well-anchored inflationary expectations will ultimately increase.    </div>

Household-based measures of US labour market strength in March suggest the Federal Open Market Committee (FOMC) will not need to alter forward guidance in 2021, despite the much larger-than-expected increase in non-farm payrolls. Meanwhile, strong readings in the ISM surveys for manufacturing and services last month suggest Q1 growth in excess of +6%, although the trajectory for Q2 will depend heavily on how new stimulus payments are utilised by US households.

Hitherto, stimulus payments to households have produced unintended consequences, notably the paying down of credit card debt and higher retail activity in the US equity market as opposed to being spent in its entirety in the real economy. The shutting down of the economy in 2020 provided households an opportunity to repair balance sheets, but the level of thrift is currently still higher than a year ago, thereby suggesting that fiscal policy easing has not been totally effective in boosting consumer spending.

The biggest threats to the outlook for US equities stem from potential policy mistakes by the Fed and the Biden Administration, notably the latter's plans for further fiscal policy expansion under the auspices of infrastructure programmes. Strong economic expansion and a rise in the velocity of circulation of money will test the tenability of the FOMC's forward guidance and asset purchases as pressure on hitherto well-anchored inflationary expectations will ultimately increase.    

Strong US Economic and Equity Market Outlooks: Investors Only Have Policy Mistakes to Fear