We’ve seen a divergence between ‘hard’ economic numbers and relatively strong ‘soft’ data including sentiment readings, and the consensus is for an economic reflation under President Trump’s direction.
To parse what this might mean for investors, we spoke with Jim Bianco, president of Bianco Research on FS Insider to get his take on the “reflation trade” underway and how he thinks 2017 will play out for the economy and financial markets.
Data Divergence May Signal Inflation
Though sentiment and other ‘soft’ economic indicators are signaling growth ahead, the hard numbers coming out aren’t as strong, Bianco stated.
‘According to a lot of the sentiment data … consumer confidence is at a 17-year high,’ he noted. ‘Markets have a narrow definition (of positive news). They care about profits and they care about businesses doing better. In that respect, they see a Trump presidency as an unabashed positive.’
However, most of the positive information coming out is in the form of surveys, he added. Here’s a short clip of what he had to say:
This post was published at FinancialSense on 02/14/2017.
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