Economy is bouncing back, award-winning forecaster says

Economy is bouncing back, award-winning forecaster says

Seth Carpenter, chief U.S. economist at UBS Stop worrying: The U.S. economy isn’t about to slip into a recession. In fact, the economy is now reaccelerating after the trade-induced winter freeze, according to economists at UBS, who won the Forecaster of the Month contest for June. It’s the 10th time UBS has won the monthly award from MarketWatch. The big question in the economy these days boils down to what you think the impact of President Donald Trump’s trade wars will be. One camp, represented by UBS chief U.S. economist Seth Carpenter and his team, believes that the tariffs are like a bump in the road, a one-time supply shock to manufacturing output and business investment that should dissipate. “It looks like a supply shock,” UBS economist Sam Coffin says. “We are growing again. Across a lot of indicators, there are broad signs of recovery since the first quarter.” “We are pretty optimistic,” Coffin says. However, the Fed is “coming at it from a different point of view,” Coffin said. Buzz kill The other camp argues that the constant threats of tariffs and trade disputes have eroded business confidence, a buzz kill that will stop companies from investing in new factories, equipment and ideas. A collapse in confidence could spiral out of control, pushing the economy over the edge into recession. The markets are betting heavily that the Federal Reserve falls into the second camp, and that Jerome Powell and his colleagues will slash interest rates later this month […]

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